Francesco Starace, Chief Executive Officer and General Manager of Enel Green Power, stated: “We are very pleased with the performance achieved by Enel Green Power in 2012. The results, all of which improved on the previous year, were attained despite the persistence of the challenging macroeconomic environment, confirming the soundness of our strategy of technological and geographical diversification. Thanks to the installation of more than 900 MW of capacity, in line with the targets we had set, our total capacity now exceeds 8,000 MW. We consolidated our presence in major markets such as the United States, Canada and Romania, as well as growing in emerging markets such as Mexico and Guatemala. Given these results, we are certain that Enel Green Power will continue to be a leader in the renewables industry in 2013.”
OPERATIONAL HIGHLIGHTS FOR 2012
Net installed capacity
The net installed capacity of Enel Green Power (hereinafter: “the Group”) as of December 31st, 2012 amounted to 8 GW, an increase of 922 MW (+13.0%) mainly in the wind sector (+774 MW) versus December 31st, 2011.
The net installed capacity of the Group as of December 31st, 2012 amounted to 8,001 MW, of which 4,315 MW (53.9%) of wind power, 2,635 MW (32.9%) of hydroelectric, 769 MW (9.6%) of geothermal, 161 MW of solar (2.0%) and 121 MW (1.5%) of other technologies (biomass and cogeneration).
On December 31st, 2012, net installed capacity of Enel Green Power amounted to 3,998 MW in the Italy and Europe area (up 11.6% on December 31st, 2011), to 2,764 MW in the Iberia and Latin America area (up 11.2% on December 31st, 2011) and to 1,239 MW in the North America area (up 22.7% on December 31st, 2011).
The growth posted in the Italy and Europe area (415 MW) was mainly driven by the entry into service of wind farms (totalling 349 MW), specifically in Romania (229 MW), Italy (93 MW) and Greece (27 MW) as well as photovoltaic plants in Italy (32 MW) and Greece (26 MW). The growth posted in the Iberia and Latin America area (278 MW) is essentially due to the entry into service of wind farms in Mexico (144 MW) and in the Iberian peninsula (55 MW) and to a hydroelectric plant in Guatemala (87 MW). The growth in the North America area is largely due to the entry into service of wind (227 MW) and solar (2 MW) capacity.
Electricity generation
Net electricity generation by the Group in 2012 exceeded 25 TWh, amounting to 25.1 TWh, up 2.6 TWh or +11.6% over 2011, of which 9.8 TWh (39.0%) of hydroelectric power, 9.0 TWh (35.9%) of wind, 5.5 TWh (21.9%) of geothermal, 0.2 TWh (0.8%) of solar and 0.6 TWh (2.4%) of other technologies (biomass and cogeneration). The average load factor (i.e., the ratio of annual net generation and theoretical annual output – for a total of 8,760 hours – expressed in nominal MW) came to 38.2% (39.9% as of December 31st, 2011). The decline in the average load factor compared with 2011 is mainly attributable to poorer water conditions in Italy during 2012 and the increase in installed wind capacity.
The expansion in output compared with 2011 is mainly attributable to an increase in wind output (+2.8 TWh), mostly reflecting the greater installed capacity, in spite of a decrease in hydro generation (-0.3 TWh) owing to the decline in water availability registered during 2012, especially in Italy.
Of total output, 13.1 TWh came in the Italy and Europe area (+4.0% compared with 2011), 8.1 TWh (+15.7% compared with 2011) in the Iberia and Latin America area and 3.9 TWh (+34.5% compared with 2011) in the North America area.
CONSOLIDATED FINANCIAL HIGHLIGHTS FOR 2012
Total revenues for the Group amounted to 2,688 million euros, an increase of 161 million euros or +6.4% on the previous year due to the net effect of an increase of 317 million euros in revenues from the sale of electricity (2,300 million euros in 2012) and a reduction of 156 million euros in other revenues (388 million euros in 2012).
The increase in revenues from the sale of electricity, including incentives, primarily reflects higher production in Iberia and Latin America (100 million euros), in North America (83 million euros) and in Italy and the rest of Europe (134 million euros).
Other revenues amounted to 388 million euros (544 million euros in 2011), and are mainly accounted for by the revenues from Enel.si’s retail business (215 million euros, compared with 248 million in 2011), the start of sales of photovoltaic panels produced by 3Sun (33 million euros, compared with 1 million euros in 2011), the termination of agreements with the partners of TradeWind that led to the cancellation of the associated liabilities for success fees in respect of projects carried out and the remeasurement at fair value of the assets and liabilities of that company, whose status with regard to control changed (for an overall 52 million euros).
In 2011, other revenues included the aforementioned significant non-recurring transactions in North America and Iberia in the total amount of 181 million euros.
Excluding the non-recurring income recognized in 2011, “total revenues” increased by 342 million euros or +14.6%
EBITDA came to 1,678 million euros in 2012, an increase of 95 million euros or +6.0% compared with 2011.
The Italy and Europe area posted 971 million euros EBITDA, an increase of 102 million euros compared with 2011 (869 million euros) mainly due to the expansion in installed capacity (415 MW), partly offset by the poorer water availability in Italy in the first quarter of 2012.
EBITDA for the Iberia and Latin America area was 497 million euros, a decline of 76 million from 2011 (573 million euros). Excluding the non-recurring income recognized in 2011 (165 million euros), EBITDA grew by 89 million euros or +21.8%, mainly attributable to the expansion in installed capacity (286 MW).
In the North America area, EBITDA was 197 million euros, a 90 million euro increase on 2011 (107 million euros). Excluding the impact of the non-recurring income posted in 2011 (16 million euros), EBITDA grew by 106 million or +116.5% mainly due to the increase in installed capacity (229 MW) as well as the other revenues that were mentioned above.
In the Retail segment, EBITDA totalled 13 million euros, down 21 million euros compared with 2011, when performance had benefited from sales of white certificates associated with energy efficiency projects carried out in previous years.
Excluding the impact of the non-recurring income recognized in 2011, EBITDA increased by 276 million euros or +19.7%.
EBIT totalled 972 million euros, up 59 million euros (+6.5%) compared with the 913 million euros posted in 2011.
The change in EBIT reflects the increase in EBITDA, only partly offset by the increase in depreciation, amortizationand impairment losses (up 36 million euros). More specifically, the increase in depreciation and amortization due to the expansion in net installed capacity and the completion in the second half 2011 of the allocation of the purchase price for the acquisitions in Iberia was partially offset by the effect of the revision of the estimated useful life of wind farms to 25 years, in line with industry practice. This operation had a positive impact of 44 million euros in 2012.
Excluding the impact of the non-recurring income and value adjustments recognized in 2011, EBIT rose by 152 million euros or +18.5%.
Group net income in 2012 amounted to 413 million euros, up 5 million euros or +1.2% compared with the 408 million euros posted in 2011. Excluding the impact of the non-recurring income (96 million euros) and value adjustments (83 million euros) recognized in 2011, Group net income rose by 18 million euros or +4.6% over 2011 (395 million euros).
Group net ordinary income in 2012, excluding gains from re-measurement at fair value and impairment losses, totalled 431 million euros, an increase of 19 million euros or +4.6% compared with the 412 million euros posted 2011.
The consolidated balance sheet as of December 31st, 2012 shows net capital employed of 12,586 million euros (11,813 million euros as of December 31st, 2011, including net assets held for sale of 4 million euros). It is funded by shareholders’ equity attributable to shareholders of the Parent Company and non-controlling interests of 7,972 million euros (7,738 million euros as of December 31st, 2011) and net financial debt of 4,614 million euros (4,075 million euros as of December 31st, 2011).
Net financial debt as of December 31st, 2012 amounted to 4,614 million euros. The increase of 539 million euros was mainly attributable to new borrowings from banks and other long-term lenders. As of December 31st, 2012, the debt/equity ratio was 0.58, compared with 0.53 at the end of 2011, while the debt/EBITDA ratio was 2.7 (2.9 as of December 31st, 2011 ).
Capital expenditure in 2012 amounted to 1,257 million euros, down 300 million euros from 2011. In addition to operating investments, the Group made financial investments mainly attributable to the acquisition of Stipa Nayaa (120 million euros) and Zopiloapan (126 million euros) in Mexico, the payment of success fees for solar projects in Italy and Greece (29 million euros) and the acquisition of additional equity interests in a number of companies carrying out a wind project in Greece (with a net positive financial impact of 22 million euros, including grants received of 32 million euros).
Group employees at December 31st, 2012 numbered 3,512 (3,230 at December 31st, 2011), an increase of 282.
PARENT COMPANY’S 2012 RESULTS
Parent Company Enel Green Power operates its own generation plants (379 geothermal, hydro, wind and solar plants), with total net installed capacity as of December 31st, 2012, of 2,772 MW and an annual output of 11.29 TWh. In addition, Enel Green Power coordinates the activities of its subsidiaries by setting their strategic targets. It also manages central treasury operations for the Group’s international operations through its subsidiary Enel Green Power International BV. In addition, it manages insurance coverage and provides assistance and guidance on organisation, personnel management and labour relations, as well as accounting, administrative, tax, legal and corporate matters.
Total revenues in 2012 amounted to 1,279 million euros (1,210 million euros in 2011), an increase of 69 million euros or +57%, thanks to a 9 million euros rise in revenues from electricity sales (equal to 1,087 million euros in 2012) and a rise of 60 million euros in other revenues (equal to 192 million euros in 2012).
The increase in other revenues mainly reflects the expansion of activities associated with the design, construction and start-up of plants on behalf of the subsidiaries.
EBITDA came to 802 million euros in 2012, virtually unchanged compared with the previous year (805 million euros).
EBIT totalled 472 million euros in 2012, down 21 million euros or -4.3% on the previous year (493 million euros). The result reflects amortization and impairment losses on equity investments totalling 330 million euros (312 million euros in 2011), partially offset by the reduction in depreciation due to the revision of the estimated useful life of wind plants to 25 years, in line with industry practice.
Net income for the year amounted to 236 million euros in 2012, down 11 million euros on the previous year (247 million euros in 2011). The performance reflects the aforementioned decline in EBIT, an increase of 15 million euros in net financial expense and an increase of 42 million euros in income from equity investments.
Net financial debt as of December 31st, 2012, amounted to 2,774 million euros (2,176 million euros as of December 31st, 2011). The 598 million euros increase is essentially attributable to new bank loans and the use of short-term lines of credit with Enel S.p.A.
Shareholders’ equity as of December 31st, 2012, came to 6,508 million euros, and is composed of share capital (1,000 million euros), the legal reserve (200 million euros), other reserves (4,458 million euros), other retained earnings (614 million euros) and net income for the period (236 million euros). The change on the previous year (up to 112 million euros) mainly reflects the recognition of net income for the year (236 million euros) and the distribution of dividends from 2011 net income (124 million euros).
RECENT KEY EVENTS
Three new wind farms enter service in Romania
On December 28th, 2012, Enel Green Power announced it had connected to the grid three new wind farms - Elcomex EOL (Zephir I), Targusor (Zephir II) and Gebelesis — located in the Dobrogea region of Romania for a total installed capacity of 206 MW. The new wind farms are expected to generate about 560 million kWh of energy each year.
The Elcomex EOL wind farm is composed of fifty-two wind turbines of 2.3 MW each for a total installed capacity of around 120 MW. The operating wind farm will be able to generate around 340 million kWh of energy each year. The Targusor wind farm is composed of twenty-six wind turbines of 2.3 MW each for a total installed capacity of around 60 MW. The operating wind farm will be able to generate more than 170 million kWh of energy per year.
The Gebelesis wind farm, in northern Dobrogea, is composed of five wind turbines of 3 MW each and six wind turbines of 2 MW each for a total installed capacity of 27 MW. The operating plant will be able to generate around 50 million kWh of energy each year. The overall investment for completion of the three plants is approximately 340 million euros.
OUTLOOK
The year 2012 was a key period in confirming Enel Green Power’s leadership in the renewable energy sector and the achievement of the strategic goals set out for the market.
In 2013, the Group will continue to implement the Strategic Plan, confirming its growth in installed capacity and focusing its efforts mainly on emerging countries through balanced growth in all main technologies. Enel Green Power will also leverage business and financial advantages by rationalizing operating costs, through the efficient operation of power plants and by achieving economies of scale, mainly in procurement.
The Group will focus on markets with abundant renewable resources, stable regulatory frameworks and strong economic growth. Enel Green Power will assess and select possible new opportunities in countries with considerable potential for expansion in order to enhance geographical diversification.
The Group will also continue to work on research and development of innovative technologies, devoting the utmost attention to environmental and safety issues.
SHAREHOLDERS’ MEETING AND DIVIDENDS
The Board of Directors has convened the Shareholders’ Meeting to address both ordinary and extraordinary business for April 24th (first call) and April 25th (second call), 2013.
The Ordinary Shareholders’ Meeting has been called to approve the statutory financial statements and to examine the consolidated financial statements for 2012, and to approve the distribution of a dividend for 2012 of 2.59 eurocents per share. Therefore, the total dividend to be paid out for 2012 amounts to 129.5 million euros out of Group net ordinary income of 431 million euros, in line with the announced dividend policy, as from 2010, to pay out no less than 30% of consolidated net income.
The Board has proposed May 20th, 2013 as the ex-dividend date and May 23rd, 2013 as the payment date.
In further ordinary business, the Shareholders’ Meeting will also be asked to appoint the members of the Board of Directors as the term of the current Board has expired and to approve a non-binding resolution on the section of the report on remuneration that sets out Enel Green Power’s compensation policy for Directors, the General Manager and executives with strategic responsibilities.
Finally, the Shareholders’ Meeting will be asked, as part of its extraordinary business, to approve one amendment to the bylaws to provide for the Shareholders’ Meeting to be convened regularly on a single call for both ordinary and extraordinary business.
The documentation on the items on the agenda of the Shareholders’ Meeting will be made available as provided for by law.
