Spain’s Endesa Q3 ’04 profits flat after tariffs rise and wholesale market falls
Spanish power utility Endesa reported flat net profits for the first nine months on Wednesday after lower wholesale pool prices were outweighed by higher tariffs and prices paid by end-users.
Net profit was up 1% to EUR 1.16 billion and operating profit grew 13% to EUR 2.60 billion. Sales rose 7% to EUR 12.86 billion. Spain accounted for about half of Endesa’s sales of 132,393 GWh, up 10%, and global output of 131,626 GWh, up 12%. Latin America and Italy accounted for the bulk of the rest.
Italy and Latin America outperformed most forecasts. Net profit in Europe -- almost all of it from Italy -- grew 324%, to EUR 123 million, while in Latin America it rose 137% to EUR 114 million.
In Spain and Portugal net profit was up 27% to EUR 808 million as Endesa retained leading market shares of just over 40% in generation, distribution and sales to end users. Generation in Spain was up 5% to 74,077 GWh and total sales increased 4% to 72,690 GWh.
Endesa’s losses from a 12% fall in Spanish pool prices to an average EUR 32.42/MWh during the period were more than offset by higher production. Sales in Spain’s regulated market were static at EUR 7.96 billion, while the volume sold increased by 4% to 62,822 GWh. Sales included a 7% fall in the generation division to EUR 2.18 billion and an 8% decline for distribution and sales to EUR 2.83 billion.
On top of lower pool prices, coal prices increased, causing most of the rise in fuel costs of 12% to EUR 1.27 billion. However, on the plus side prices paid by end users increased. Regulated tariffs were up 2%, liberalised market prices increased 6% and there were higher special payments for operations on Spain’s islands.
In the liberalised market sales soared 23% to 22,858 GWh and by value they were up 31% to EUR 1.36 billion. The number of eligible clients was 415,000.
Gas sales also increased in the liberalised market by 67% to 7,887 GWh, forming the bulk of the total of 10,604 GWh. Sales were worth EUR 159 million, up 27%. If sales of 11,947 GWh to Endesa CCGTs are included, the group had a market share of 10%. DM
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