Endesa reports a year marked by a wave of exceptional negative impacts that weighed heavily on its results. The company posted a net profit of 742 million euros for the previous year, a drop of almost 71% from more than 2.54 billion euros achieved in 2022 and roughly half of the 1.435 billion recorded in 2021, according to the financial results conveyed to the CNMV. These figures illustrate how extraordinary charges can profoundly distort annual performance, even for a utility of Endesa’s size and reach. This decline is not simply a blip; it reflects a complex mix of one-off costs and structural adjustments that have shaped the earnings narrative for the year.
Several factors contributed to the unusually weak results. First, the company faced a net negative impact of 398 million euros from a dispute involving a liquefied natural gas supplier. Added to this were the costs associated with the temporary tax on large energy companies, totaling 208 million euros, alongside provisions for workforce adjustments tied to digitalization initiatives amounting to 124 million euros. When these extraordinary items are removed, the ordinary net profit stands at 951 million euros, representing a 60% decrease from the prior year. The board has nonetheless approved a dividend of one euro per share, signaling confidence in the medium-term cash flow health despite the current headwinds. These dynamics show how nonrecurring items can overshadow underlying operating performance in annual reporting, a reminder for investors to look beyond headline profits to assess ongoing profitability and capital returns. (Endesa annual report, 2024)
Endesa also disclosed an EBITDA of 3,777 million euros on a reported basis, down 32% due to the same set of extraordinary factors. On a comparable basis, EBITDA reached 4,392 million euros, reflecting an 18% decline from the prior year’s baseline. This distinction between reported and comparable EBITDA helps investors gauge the core operating trajectory independent of one-off charges and accounting adjustments. The company emphasises that the year closed amid exceptional circumstances, and it reiterates a forward-looking stance grounded in the normalization of market conditions. (Endesa annual report, 2024)
According to the chief executive officer, José Bogas, the organization expects a return to growth in the current year as market conditions stabilize. The plan hinges on a normalization of gas margins and conventional generation margins, supported by a strategy of pre-selling future production to mitigate price volatility. Bogas reaffirmed the financial targets outlined during the Capital Markets Day, including an EBITDA of between 4,900 and 5,200 million euros, representing an 11% to 18% increase, and a rise of 60% to 70% in ordinary net profit to the range of 1.6 to 1.7 billion euros by 2026. These guidance points underscore the management’s view that normalization, coupled with disciplined risk management, can restore the company’s earnings trajectory over the medium term. (Endesa annual report, 2024)