Endesa reports solid six‑month results amid market volatility
Endesa posted an ordinary net profit of 734 million euros for the first six months of the year. Earnings before interest, taxes, depreciation, and amortization (Ebitda) rose 4 percent to 1,950 million euros, though this figure sits 12 percent below the prior year’s level when excluding the sale of 51 percent of the Endesa X electric mobility business to its parent company, Enel, in April. Including the proceeds from this transaction, amounting to 182 million euros, the net profit would be up 10 percent and the Ebitda up 17 percent.
The company describes these results within a challenging market landscape shaped by the Ukraine conflict and a surge in energy commodity prices, especially natural gas. Endesa reaffirmed its year‑end targets of 1,800 million euros in normal net income and 4,100 million euros in Ebitda. In addressing analysts at a conference, Endesa CEO Joseph Bogas highlighted the group’s flexible model as a key factor enabling it to navigate what he called one of the most complex and rapidly changing scenarios in recent memory.
The first six months saw the group generate total revenues of 14,841 million euros, marking a 64.4 percent increase from the same period last year.
Regarding the new windfall energy tax under discussion by the government, Bogas declined to offer judgments without the full details. He noted that the tax would have to balance its extraordinary benefits with the risk of undermining energy companies during the ongoing crisis. He also recalled that the European Commission has stressed that any new rate should not be excessive or threaten renewable investments or the carbon market, and Endesa would monitor equity and compliance implications as the policy evolves.
Endesa emphasized that it has fixed the sale of only marginal electricity generation for this year and 80 percent of next year at a price of 65 euros per megawatt-hour, a level the manager described as reasonable and below the 67 euros per megawatt-hour benchmark. The company clarified that it does not immediately pass through energy price increases to customers, but it acknowledged that contract renewals in the second half could lead to price adjustments and improved margins. Bogas stated clearly that the goal remains to offer customers the best possible price while sustaining profitability.
As of June, Endesa reported a domestic customer base of 10.4 million in Spain, a 3 percent increase from mid‑year last year. Of these, 6.6 million are in the free market, an increase of one million versus the first half of 2021, while the remaining 3.9 million operate in the regulated market in response to higher energy costs, a segment that shrank 16 percent from the previous quarter.
The company’s net debt stood at 10,275 million euros, up 1,470 million from the end of 2021. This rise reflects continued investment activity, a temporary dip in free cash flow driven by higher pending regulatory items, and an increase in raw materials and tolls, alongside a dividend payment of 536 million euros tied to January 2021 results. Endesa continues to navigate a difficult macro environment with a focus on disciplined capital allocation and maintaining customer stability across its Spanish footprint, while remaining attentive to policy developments that could influence its earnings profile.