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Endesa 2007 Net Profit -9.9%; Comparisons Harsh

Endesa 2007 Net Profit -9.9%; Comparisons Harsh
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Πεμ, 21 Φεβρουαρίου 2008 - 03:11
Spanish power utility Endesa SA (ELE.MC) Thursday said net profit fell 9.9% last year due to unfavorable comparisons with 2006 results that were boosted by extraordinary gains.
Spanish power utility Endesa SA (ELE.MC) Thursday said net profit fell 9.9% last year due to unfavorable comparisons with 2006 results that were boosted by extraordinary gains.

Madrid-based Endesa, jointly taken over last year by Spain's Acciona SA (ANA.MC) and Italy's Enel SpA (EN), said net profit stood at EUR2.68 billion for the 12 months to Dec. 31, compared with EUR2.97 billion in the same period a year ago.

Endesa didn't provide a breakdown of fourth-quarter results. According to calculations by Dow Jones Newswires, fourth-quarter net profit rose 52% to around EUR700 million from around EUR460 million.

The company said last year's net profit included EUR719 million in extraordinary gains, mainly due to asset sales undertaken to boost return to shareholders, while Endesa was defending itself from an unsolicited bid from Spanish gas distributor Gas Natural SDG SA (GAS.MC).

Excluding those gains, the net profit would have risen 14.2% on a like-to-like basis, Endesa added.

Antonio Lopez, a Madrid-based analyst with Fortis, said that 2007 earnings came roughly in line, with a poor operating performance in Spain - on weak demand due to mild weather all year - that was offset by a strong contribution from the company's international operations, particularly in Latin America.

Lopez said that the results should be neutral for the share price. Fortis reiterated its hold rating, EUR41.5 target on Endesa.

At 0840 GMT, Endesa shares were up EUR0.09, or 0.3%, at EUR33.51.

They have lost ground ever since Acciona and Enel paid EUR40.16 a share for a majority stake, putting an end to a bidding battle started in 2005 that resulted in the doubling of the company's market value.

Sales rose 9.7% to EUR17.7 billion from EUR16.2 billion, supported by higher power distribution volumes in the company's Latin American operations, even as total power generation fell 1.3% from 2006.

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