Enel's revenue and market capitalization

  •   DEHOUI Lionel

Founded in 1962 and based in Rome, Italy, Enel is a company that operates in the energy sector. It is recognised as the leader in the production and distribution of electricity in Italy. In 2020, the group suffered the effects of the coronavirus pandemic. In particular, the health crisis affected the entire energy sector. Here are the main points to remember about the company's annual results for this year.

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Enel's revenue and market capitalization

Falling turnover in the 2020 financial year

The health crisis in Covid-19 affected the smooth running of the energy business in 2020. This situation has not spared the Enel Group, which has seen its revenues fall during the year. For the full twelve months of this financial year, the Italian energy giant had annual revenues of €64.98 billion.

It reported a decline of 19.1% compared to 2019. This decline is explained in particular by the impact of the pandemic on the company's business. The pandemic resulted in the sale of small quantities of electricity and gas in Italy and Spain. Also, the decline in turnover was caused by negative exchange rate effects in Latin America.

On the other hand, the turnover for 2020 came in below market expectations. 77.8 billion for this year.

 

Performance of other financial indicators in 2020

Despite the impact of the coronavirus epidemic on its business, the Enel Group has recorded an increase in profits in 2020. Indeed, for the year as a whole, the company's net profit reached €2.6 billion. 2.6 billion, up 20.1% on the previous year's level.

This growth was driven by significant value adjustments. In the previous year, the company was forced to write down assets, particularly its coal-fired power plants. The increase in net profit was also attributed to improved financial management during 2020.

Excluding exceptional items, net profit was €5.19 billion, up 9% year-on-year. In addition, the Italian group posted a gross operating surplus (Ebitda) of 16.8 billion euros in 2020. It fell by 5% over a year. Excluding exceptional items, it rose by 0.2% to 17.9 billion euros.

This figure is in line with the company's objectives. In addition, the company has valued the good performance of its subsidiary Enel Green Power. Its activity is essentially in renewable energy. It recorded an improvement in its Ebitda in 2020. This evolution was supported by the remarkable performance of the hydroelectric power stations.

It was also driven by the installation f new units in Spain, Greece, the United States, Canada and Brazil. At the end of the 2020 financial year, the group posted net debt of 45.4 billion euros, compared to 45.2 billion euros a year earlier. This is an increase of 0.5%, mainly due to the investments made during the year.

 

About investments in renewable energy

One of Enel's major objectives for the coming years is to become a key player in the field of renewable energy. In this context, the Group has already begun to make efforts to achieve this. In fact, it has put in place a strategic plan based on decarbonisation and digitalisation.

To this end, the company plans to accelerate its investments in renewable energy. Thus, it has invested €10.2 billion in 2020, a growth of 2.5%. Moreover, in November 2020, the Italian giant announced its intention to invest €17 billion in this sector by 2023.

On the other hand, the company emphasised that it was considering bringing forward the closure of its coal-fired power plants around the world to 2027. This was previously planned to be done in 2030. In 2020, its subsidiary Enel Green Power (which specialises in this field) recorded growth in its global renewable energy capacity. This reached 49 gigawatts, an increase of 3.1 gigawatts.

This is a new annual record for the company. This performance was achieved despite the difficult context of the Covid-19 health crisis. Furthermore, at the end of October 2020, the Enel Group made a commitment to reduce its greenhouse gas emissions by 80% (by 2030), compared to the 2017 level.

In doing so, the company has increased its target from 70%. This is to comply with the United Nations' ambition to limit global warming to 1.5 degrees compared to pre-industrial levels.

 

Enel's dividend and market capitalisation

Like many other companies operating in the energy sector, Enel also pays a dividend to its shareholders. For the financial year 2020, the company's Board of Directors decided to propose the distribution of a coupon of 0.358 euro per share, an increase of 9.1%.

In addition, the company has a strong presence on the stock markets. It is listed on the Borsa Italiana MTA market in Italy. It is also included in the FTSE MIB stock index. As of November 2021, its market capitalisation is estimated to be over 70 billion euros.

 

Enel share price comparison with Iberdrola on 2020 results

Like Enel, the Iberdrola Group's business was impacted by the Covid-19 health crisis in 2020. For the year as a whole, it achieved a turnover of 36.44 billion euros. In this respect, the historical Italian energy company far outstripped its competitor with its annual turnover of €64.98 billion.

For the year as a whole, both companies recorded an increase in net profit. However, the Spanish company's net profit (EUR 3.6 billion) was higher than that of the Enel group (EUR 2.6 billion). Also, at the end of the 2020 financial year, Iberdrola's net debt (€35.142 billion) is lower than that of the Italian giant (€45.4 billion).

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