SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of November 2007
Enel Società per Azioni
Viale Regina Margherita 137
00198, Rome
Italy
Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.
Form 20-F
þ
Form 40-F
o
Indicate by check mark whether the registrant by furnishing the information contained in this
Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes
o
No
þ
If Yes is marked, indicate below the file number assigned to the registrant in connection
with Rule 12g3-2(b):
Certain of the information included in this Report is forward looking and is subject to important
risks and uncertainties that could cause actual results to differ materially. The Companys core
business includes the generation, distribution and sale of electricity and the distribution and
sale of gas. The Companys outlook is predominately based on its interpretation of what it
considers to be the key economic factors affecting its businesses. Forward-looking statements with
regard to the Companys businesses involve a number of important factors that are subject to
change, including: the many interrelated factors that affect customers demand, including general
economic conditions, industry trends, and increased competition in each of the Companys markets;
the Companys ability to implement successfully its cost reduction program; the Companys ability
to implement its strategy focused on its core energy business; future capital expenditure and
investments; legislation, particularly that relating to the regulation of the markets for
electricity and other public utility services, tariff regimes, the environment, trade and commerce
and infrastructure development; the actions of competitors in various industries in which the
Company competes; production difficulties, including capacity and supply constraints; labor
relations; interest rates and currency exchange rates; political and civil unrest; and other risks
and uncertainties.
The information included in this Report has been given to Commissione Nazionale per le Società e la
Borsa (CONSOB), the Italian public authority regulating Italian capital markets, and/or to Borsa
Italiana S.p.A.
,
the company owning and managing the Mercato Telematico Azionario, the Italian
automated screen-based trading system on which the ordinary shares of Enel Società per Azioni are
listed, or is otherwise furnished pursuant to General Instruction B to the General Instructions to
Form 6-K.
Press Release
NOT FOR RELEASE IN THE UNITED STATES, CANADA OR JAPAN
This announcement is not an offer for sale of the notes in the United States. The notes have not
been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the Securities
Act), or any U.S. state securities laws, and may not be offered or sold within the United States or
to, or for the account or benefit of, any U.S. person (as defined in Regulation S under the
Securities Act (Regulation S)) except pursuant to an applicable exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act.
TWO BILLION EURO ENEL BOND ISSUE FOR ITALIAN RETAIL INVESTORS
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Enel returns to the Italian retail investors Bond market with a new issue. This issue
features a minimum lot of 5,000 Euro and a 7-year and one month maturity.
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Investors can choose between fixed rate and floating rate, with the coupons easy to
calculate.
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The bonds are issued free of subscription fees and commissions. The bonds will be listed on
the
Mercato Telematico delle Obbligazioni
(MOT), organised and managed by Borsa Italiana
S.p.A., and will therefore be highly liquid, which will facilitate trading on the secondary
market.
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The offering may be increased up to 3 billion EURO in case of excess of demand.
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Rome, November 13, 2007
CONSOB (the Italian Stock Exchange Regulator) approved the prospectus
relating to the offering and listing on the
Mercato Telematico delle Obbligazioni
(MOT), organised
and managed by Borsa Italiana S.p.A., of a maximum aggregate amount of 2 billion euro Enel bonds
reserved for Italian retail investors. Such amount may be increased up to 3 billion euro in case of
excess of demand. The issue was approved by the Enel Board of Directors on July 26, 2007. The
Company will mainly use the funds to partially reimburse the financing received for the joint
public tender offer launched by Enel Energy Europe (an Enel subsidiary) and Acciona over the entire
share capital of Endesa and recently closed successfully.
Offer period and minimum lot size
The offering will take place from November 19, 2007 to December 7, 2007, unless the offer is closed
early, in the cases set out in the prospectus. Investors can subscribe for the fixed or
floating-rate bonds with a minimum investment of 5,000 euro, equal to 5 bonds with a par value of
1,000 euro each.
Maturity, transparency and flexibility
Both fixed-rate and floating-rate bonds have a 7-year and one month maturity (due on January 2015).
The principal will be repaid in full at maturity. Investors will be able to trade their bonds (in
any nominal multiple of 1,000 euro) at any time following the offering period at market prices,
since the bonds will be listed on the
Mercato Telematico delle Obbligazioni
(MOT), organised and
managed by Borsa Italiana S.p.A, where performance can be tracked daily in specialised newspapers
and on the Internet.
Commissions and tax treatment
Subscribers will not be charged of any subscription fees or commissions. The coupon amount relating
to the bonds is intended to be gross of any applicable tax due under Italian taxation laws
applicable at the time of payment .The current substitutive tax rate applicable to bond interest is
equal to 12.5%.
Fixed-rate bonds
Interest will be paid to the bondholders annually in arrears, except for the first interest period,
whose coupon will be paid after one year and one month. The coupon amount on the fixed-rate bonds
(ENELTF2007-2015) will be announced within 5 days following the offer period by means of a notice
published on a financial newspaper with nationwide distribution and calculated as the sum of the
linear interpolation of the 7-year mid swap rate and the 8-year mid swap rate at the end of the
offer period and an additional spread to be defined at the end of such period. This spread will be
included in a range of 40 and 90 basis points.
During the first six months of 2007, the 7-year mid swap rate ranged from a low of 4.0801% to high
of 4.8788%; the 8-year mid swap rate ranged from a low of 4.1030% to high of 4.8985% (Source:
Bloomberg).
Floating-rate bonds
Interest will be paid to the bondholders semi-annually in arrears, except for the first interest
period, whose coupon will be paid after seven months. For the entire life of the floating-rate
bonds (ENELTV2007-2015), the coupon amount will be calculated as the sum of the 6-month EURIBOR (or
the 7-month EURIBOR for the first interest period only) and an additional spread, which will be
included in a range of 40 and 90 basis points, to be determined at the end of the offer period.
Interest will be calculated on the basis of the actual number of days in the interest period. The
spread will be announced within 5 days following the offering period by means of a notice published
on a financial newspaper with nationwide distribution.
During the first six months of 2007, the 6-month EURIBOR rate ranged from a low of 3.857% to high
of 4.315% (Source: Bloomberg).
Underwriting and placement syndicate
Enel has appointed Banca IMI (Intesa Sanpaolo Group) and Bayerische Hypo- und Vereinsbank AG, Milan
Branch (UniCredit) (UniCredit Group) as lead managers and offering coordinators. The bonds will be
placed by a placement and guarantee syndicate coordinated and directed by Banca IMI e UniCredit and
composed of Banca Akros S.p.A., BNP Paribas, Centrobanca S.p.A., Dexia Crediop S.p.A. and MPS
Capital Services Banca per le Imprese S.p.A., as well as a list of other distributors which will be
filed with CONSOB, deposited at the registered office of the Company and published on Il Sole 24
Ore or MF or another financial newspaper with nationwide distribution within the first day prior
to the beginning of the offering period. Such a notice will also specify the distributors which
will place the bonds to the public at large on-line.
Press Release
ENEL PRODUZIONE AND DOLOMITI ENERGIA SIGN MEMORANDUM OF UNDERSTANDING TO DEVELOP HYDRO POWER IN THE
PROVINCE OF TRENTO
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Enel Produzione will sell to Dolomiti Energia 51% of a NewCo for 561 million euros, subject
to adjustment, to which it will transfer the hydroelectric operations of the Province of
Trento, and to which Enel Rete Gas will transfer 100% of Avisio Energia.
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The agreement is subject to the granting of an extension of at least 10 years of the
hydroelectric concessions involved in the deal and approval of the antitrust authorities.
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Conti: This is an important agreement for the development of an invaluable source of
renewable energy, contributing to the fight against climate change and the energy security of
the country.
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Rome, November 14, 2007
Enel Produzione SpA and Dolomiti Energia SpA, the latter owned by
Tecnofin Trentina SpA (28.07%), Trentino Servizi SpA (24.16%), FT Energia SpA (22%), Fondazione
Cassa di Risparmio di Trento e Rovereto (10%) and a number of local Trento utilities and private
industrial shareholders, late yesterday evening signed a Memorandum of Understanding (MoU) for
the development of the hydroelectric power sector in the Province of Trento.
With this agreement, remarked Enel CEO Fulvio Conti, Enel Produzione and Dolomiti Energia have
begun an important collaborative initiative, which will help enhance the development of an
invaluable source of renewable hydroelectric energy, which the Province of Trento has in abundance.
It is an essential resource, making a real contribution to the fight against climate change and the
energy security of the country.
The agreement provides for the sale to Dolomiti Energia of 51% of a NewCo to be formed by Enel
Produzione. Before the sale, Enel Produzione will spin off its hydroelectric generation operations
in the Province of Trento to the NewCo and Enel Rete Gas SpA will transfer 100% of Avisio Energia
SpA, which distributes natural gas in 32 municipalities in the Province of Trento.
The operations being transferred to the NewCo include 14 concessions for major hydroelectric
derivations and 22 power plants with a total efficient capacity of 1.4 GW and an annual output of
3.6 TWh, as well as 7 mini-hydro plants (small derivations) with a total efficient capacity of 14
MW with an annual output of about 46 GWh.
The price for the 51% stake in the NewCo being sold to Dolomiti Energia has
provisionally been set at 561 million euros and will be paid in full at the time of the sale. The
amount may be adjusted in relation to the actual net financial position of the operations
transferred to the NewCo at the sale date, as well as the difference between the estimated value of
production and actual production of the unit between 2008 and 2010.
Completion of the transaction is also subject to the official definitive extension of the
concessions for major hydroelectric derivations that will be transferred to the NewCo, which are
currently scheduled to expire on 31 December 2010, by at least 10 years. This extension, once
requested by Enel Produzione and provided for by final regulations, will enable the parties to
implement fully the business plan they have developed. The sale of the 51% interest in the NewCo to
Dolomiti Energia is also subject to receipt of approval of the transaction from the Italian
antitrust authorities.
The agreement also gives Dolomiti Energia a call option to acquire an additional interest in the
NewCo from Enel Produzione. The option can be exercised by 31 December 2020 subject to the
condition that the duration of the concessions for the major hydroelectric concessions held by the
unit being transferred to the NewCo is modified.
Exercise of the call option will entitle Dolomiti Energia to acquire 9% of the NewCo if, at the
time the option is exercised, its holding in the NewCo is still 51%; otherwise, the capital
underlying the call option will be recalculated on a proportionate basis. The strike price of the
call option will be based on the initial price of the 51% stake, provisionally set at 561 million
euros, subject to adjustment for any extraordinary capital operations or dividend distributions by
the NewCo.
The parties to the transaction have undertaken in the MoU to sign the sale contract within 60 days
and agree the final text of the NewCos bylaws (which will give the two shareholders a reciprocal
right of pre-emption) and a shareholders agreement under which the parties undertake not to
transfer their holdings in the NewCo for a period to be agreed.
Under the MoU, until the date of the shareholders meeting called to approve the financial
statements for the 2010 financial year, the NewCo will be governed by a board of directors made up
of five members, of which two appointed by Dolomiti Energia (one of whom will be elected chairman)
and three by Enel Produzione (one of whom will be elected chief executive officer).
In view of these governance arrangements, for the first three years of the shareholders agreement
Enel Produzione will exercise a dominant influence over the NewCo and, in compliance with the
provisions of law and international accounting standards, will therefore consolidate the NewCo on a
full line-by-line basis.
Press Release
ENEL: TENDER OFFER FOR RUSSIAN OPERATOR OGK-5 LAUNCHED
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Enel Investment Holding has launched a public tender offer for the entire share capital of
OGK-5 at a price of 4.4275 rubles per share, following the clearance received by the Russian
financial markets regulator (FSFR).
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The tender acceptance period will last 80 days.
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Rome, November 15, 2007
Enel S.p.A. (Enel) announces that its wholly-owned Dutch subsidiary Enel
Investment Holding B.V. (EIH) has launched today a mandatory public tender offer for the entire
share capital of the generation company OAO OGK-5 (OGK-5) following the clearance received by the
Russian financial markets regulator (FSFR). The duty to launch the offer arises from the overcoming
the 30% ownership threshold of OGK-5s share capital by EIH, following the acquisition of a stake
of about 7.15% completed on October 26, 2007.
On August 16, 2007, EIH received from the Russian antitrust authority (FAS) the authorization to
increase its stake and buy up to 100% of OGK 5s share capital. This authorization has a validity
period of 1 year.
The tender offer affects about 22,231 million OGK-5 shares (equal to 62.85% of the Russian
companys share capital, net of the 37.15% already owned by EIH) and has been launched at a price
of 4.4275 rubles per share, fully payable in cash.
The offer price is equal to the highest price paid by the offeror for the acquisition of OGK-5
shares in the last six months. In the event all OGK-5 shareholders accept, the maximum
consideration EIH should pay will be about 98,427 million rubles (equal to around 2,742 million
euro at the current exchange rate of 35.8926 rubles for 1 euro). The acquisition will be financed
with existing credit lines.
OGK-5 shareholders will have 80 days to accept the offer, starting from the official notification
of the offer to OGK-5 occurred today.
Set up in 2004 as part of the electricity industry reform, OGK-5 is one of six wholesale generation
companies in Russia where the privatization process is underway. Its four thermal plants are
strategically located in some of the most developed and fastest growing regions of the country and
include:
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2,400 MW of gas-fired capacity at Konakovskaya in the Tver Region (Central Russia)
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1,290 MW of gas-fired capacity at Nevinnomysskaya in the Stavropol Region (Southern
Russia)
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3,800 MW of coal-fired capacity at Reftinskaya in the Sverdlovsk Region (Urals)
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1,182 MW of gas-fired capacity at Sredneuralskaya in the Sverdlovsk Region (Urals).
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In the first half of 2007 OGK-5 posted revenues of 13,748 million rubles, an operating profit of
1,370 million rubles and a net income of 1,200 million rubles.
The tender offer for OGK-5 is part of Enels strategy aimed at strengthening the Groups position
in the Russian market, where Enel was the first non-Russian player to be awarded generation assets
as part of the ongoing liberalization and privatization of the electricity sector.
Enel is a vertically integrated Group in Russia. In addition to the stake in OGK-5, the Enel Group
currently owns 40% of the Severnaya Energia consortium (previously named Enineftegaz), with Eni
holding the remaining 60%. The consortium has acquired a number of promising natural gas assets
(OAO Arcticgaz, Urengoil and OAO Neftegaztechnologia). Moreover, the Enel Group also holds 49.5% of
RusEnergoSbyt, the countrys leading independent electricity supplier.
Report on the
3rd Quarter of 2007
Contents
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5
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6
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7
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9
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11
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14
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16
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20
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24
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30
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36
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40
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47
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51
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52
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53
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54
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55
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68
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The Enel structure
Corporate
Enel SpA
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Domestic Generation and
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Domestic Infrastructure and
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Domestic Sales Division
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Energy Management Division
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Networks Division
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> Enel Distribuzione
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> Enel Produzione
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> Enel Distribuzione
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> Enel Energia
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> Enel Trade
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> Enel Rete Gas
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(formerly Enel Gas)
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> Enel.si
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> Enel Sole
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> Deval
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> Deval
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Services and Other
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International Division
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Activities
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> Slovenské elektrárne
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> Enel Viesgo Generación
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> Enel Servizi
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> Enel Maritza East 3
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> Enel Viesgo
Energía
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> Sfera
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(formerly Maritza East III
Power Company)
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> Enel Operations Bulgaria
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> Enel Unión Fenosa Renovables
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> Dalmazia Trieste
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(formerly Maritza East 3
Operating Company)
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> Enel North America
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> Electra de Viesgo Distribución
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> Enelpower
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> Enel Latin America
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> Enel Viesgo Servicios
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> Enel.NewHydro
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> Enel Panama
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> RusEnergoSbyt
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> Enel.Factor
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> Enel Fortuna
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> Enineftegaz
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> Enel.Re
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> Enel Distributie Banat
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> Enel France
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(formerly Enel Electrica
Banat)
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> Enel Distributie Dobrogea
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> Enel Erelis
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(formerly Enel Electrica
Dobrogea)
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> Enel Energie
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> Enelco
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> Enel Romania (formerly
Enel Servicii)
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> Enel Servicii Comune
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5
Foreword
The consolidated report at September 30, 2007 has been prepared in compliance with the IFRS-EU and
with Consob Regulation no. 11971/1999 and subsequent amendments.
The recognition and measurement criteria adopted in the consolidated financial statements at
September 30, 2007, which have not been audited, are consistent with those used to prepare the
consolidated financial statements at December 31, 2006 and the consolidated financial statements at
September 30, 2006, supplemented by the recognition and measurement policies for mining businesses
as concerns tangible and intangible assets following the acquisition of former Yukos assets in the
2nd Quarter of 2007. This operation is discussed in greater detail in the half-year report at June
30, 2007.
6
Summary of results
Highlights
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3rd Quarter
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First nine months
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2007
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2006
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2007
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2006
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Income data
(millions of euro)
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9,903
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9,556
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Revenues
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28,760
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28,621
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2,249
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1,903
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Gross operating margin
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6,711
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6,264
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1,617
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1,320
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Operating income
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4,751
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4,885
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705
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693
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Net income before minority interests
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2,753
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2,720
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696
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662
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Group net income
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2,678
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2,640
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Financial data
(millions of euro)
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Net capital employed
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43,745
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30,715
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(1)
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Net financial debt
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24,769
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11,690
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(1)
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Shareholders equity (including minority interests)
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18,976
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19,025
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(1)
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Cash flow from operations
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3,910
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5,403
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Capital expenditure on tangible and intangible assets
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2,518
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1,795
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Per share data (euro)
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Group net income per share in circulation at period-end
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0.43
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0.43
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Group shareholders equity per share in circulation at period-end
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2.95
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2.99
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(1)
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Operating data
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43.1
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40.9
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Electricity sold by Enel (TWh)
(2)
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127.4
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117.0
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69.0
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67.4
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Electricity transported on the Enel distribution network (TWh)
(3)
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201.1
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199.9
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0.9
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0.7
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Gas sales (billions of cubic meters)
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3.9
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4.3
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0.5
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0.5
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- of which to end users (billions of cubic meters)
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|
|
2.9
|
|
|
|
3.2
|
|
|
32.1
|
|
|
|
35.7
|
|
|
Net electricity generated by Enel (TWh)
|
|
|
95.9
|
|
|
|
98.6
|
|
|
|
|
|
|
|
|
|
Employees at period-end (no.)
|
|
|
56,057
|
|
|
|
58,548
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market indicators
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Brent oil price ($/bbl)
|
|
|
67.1
|
|
|
|
67.0
|
|
|
|
|
|
|
|
|
|
Average price of low-sulfur fuel oil ($/t)
(4)
|
|
|
335.4
|
|
|
|
329.9
|
|
|
|
|
|
|
|
|
|
Average price of coal ($/t fob)
(5)
|
|
|
50.9
|
|
|
|
48.2
|
|
|
|
|
|
|
|
|
|
Average dollar/euro exchange rate
|
|
|
1.344
|
|
|
|
1.245
|
|
|
|
|
|
|
|
|
|
Six-month Euribor rate (average for the period)
|
|
|
4.24
|
%
|
|
|
3.07
|
%
|
|
|
|
(1)
|
|
At December 31, 2006.
|
|
(2)
|
|
Excluding sales to resellers.
|
|
(3)
|
|
Excluding power transported in the previous period but recognized commercially in the two reference periods, equal to 1.3 TWh
and 0.6 TWh in the first nine months of 2007 and the first nine months of 2006, respectively.
|
|
(4)
|
|
Platts CIF Med index.
|
|
(5)
|
|
Coal Week International index for the mix considered by the Authority for Electricity and Gas.
|
7
Highlights of results in the first nine months of 2007
In the first nine months of 2007, revenues came to
28,760 million, substantially in line (up
0.5%) with the same period of 2006.
The
gross operating margin
amounted to
6,711 million, compared with
6,264 million for the
first nine months of 2006, an increase of
447 million or 7.1%, with growth being registered
across all Divisions, partially offset by lower margins for the Parent Company and for Services and
Other Activities.
Operating income
in the first nine months of 2007 totaled
4,751 million for the first nine
months of 2007, a decrease of
134 million or 2.7%. The decline essentially reflects the income
generated in 2006 from the exchange of 30.97% of Wind for 20.9% of Weather Investments in the
amount of
263 million.
Group net income
amounted to
2,678 million, compared with
2,640 million in the year-earlier
period (up 1.4%), which included the income from the Wind-Weather equity exchange.
Net financial debt
at September 30, 2007 came to
24,769 million, an increase of
13,079
million over the
11,690 million at December 31, 2006, mainly related to the significant foreign
acquisitions in progress at the balance-sheet date. The ratio of debt to equity at September 30,
2007 was 1.31, compared with 0.61 at the end of 2006.
Group
employees
at September 30, 2007 numbered 56,057, a decrease of 2,491 employees from the
58,548 at the end of 2006. The decline is mainly due to the negative balance of 2,635 between new
hires and terminations.
8
Regulatory and rate issues
Liberalization of electricity sales
On June 18, 2007, the Government issued Decree Law 73/2007 (ratified with Law 125 of August 3,
2007) in the run up to the subsequent opening of the electricity market to residential customers,
which took place on July 1, 2007. The measure establishes:
§
|
|
the obligation for corporate separation between distribution and sales activities for
distribution companies with more than 100,000 customers;
|
|
§
|
|
provisions to ensure non-discriminatory access to metering data;
|
|
§
|
|
provisions to ensure the supply of electricity by distribution companies, or related sales
companies, to residential customers and small businesses that do not opt for the free market
(the enhanced protection market). For these customers, the provisioning of electricity shall
be guaranteed by the Single Buyer. The standard conditions and reference prices for the
service are determined by the Authority for Electricity and Gas;
|
|
§
|
|
the presence of a safeguard supplier, selected by tender, for customers not eligible for
enhanced protection (businesses with more than 50 employees or annual revenues of more than
10 million) that do not opt for the free market or that should find themselves without a
supplier (the safeguard market). Until the completion of the tender (the rules for which
will be established in a decree of the Minister for Economic Development), these customers
will temporarily be provided service by distribution or related sales companies without any
intermediation by the Single Buyer.
|
In accordance with the provisions specified above, Enel Distribuzione and Deval will no longer be
directly providing service to the customers of the regulated market, now replaced by the enhanced
protection and safeguard markets described above. Supply to customers that do not exercise the
option to receive service on the free market and that are eligible for the enhanced safeguards
mechanism (residential customers and small businesses with fewer than 50 employees and annual
revenues of less than
10 million) will be handled by special-purpose companies established
within 180 days of the date on which the aforementioned decree went into effect. These
newly-established companies will continue to obtain power from the Single Buyer in order to serve
these customers.
9
The Bersani bill
As regards the regulations governing derivatives connected with physical markets for electricity
and gas, which are contained in the Bersani bill, Legislative Decree 164 of September 17, 2007,
in implementation of Directive 2004/39/EC concerning markets in financial derivatives, amended the
Consolidated Law on Financial Intermediation (Legislative Decree 58 of February 24, 1998), granting
access to regulated markets in electricity derivatives to electricity companies as well as
financial institutions. The decree also specifies the division of responsibilities between Consob
and the Authority for Electricity and Gas for these markets.
Electricity import contracts
Enel has two contracts for the import of electricity, one with EdF (on the French border,
terminating on December 31, 2007) and the other with Atel (on the Swiss border, terminating on
December 31, 2011). The power imported under the contract with Atel is sold to the Single Buyer at
a set price and is used to supply the enhanced protection market.
For 2007, with a decree of December 15, 2006, the Minister for Economic Development decided:
§
|
|
to maintain the sale price to the Single Buyer at
66/MWh in 2007, also providing for
the possible indexing of that value to wholesale electricity prices in Italy using a mechanism
to be established in accordance with criteria defined by the Authority. With Resolution no.
82/07, the Authority established the procedure for the quarterly adjustment of the price,
which has been set at
66.28/MWh for the 2nd Quarter of 2007, at
63.75/MWh for the 3rd
Quarter and at
62.46/MWh for the 4th Quarter;
|
§
|
|
to maintain retained the capacity reserve on the Swiss border with regard to the contract
with Atel, with the joint agreement of Italian and Swiss authorities;
|
§
|
|
to not maintain the import capacity reserve on the Italian-French border for the long-term
contract with EdF. Accordingly, in 2007 the electricity under the contract will be sold by
Enel in foreign markets, mainly in France.
|
Enels appeal to the French Administrative Court against the decision of the French regulator (CRE)
of December 2005 that it would not reserve any import capacity for the performance of the contract
between Enel and EdF for 2006 was denied by the French Council of State in its ruling no. 289687 of
March 30, 2007.
10
Significant events in the 3rd Quarter of 2007
Public tender offer for Endesa
On July 2, 2007, Enel and Acciona, in application of previous market announcements, adjusted the
offer price set in the public tender offer launched for 100% of Endesa to take account of the
dividend distributed to Endesa shareholders. The new price was therefore set at
40.16 per
share, being the difference between the
41.30 price per share announced on April 11, 2007 and
the dividend of
1.14 per share approved by the Endesa shareholders on June 20 and paid on July
2, 2007.
On July 5, 2007, the European Commission approved the operation undertaken jointly by Enel and
Acciona to acquire exclusive control of Endesa by way of a public tender offer.
On July 25, the Board of Directors of Spains Comisión Nacional del Mercado de Valores (CNMV)
authorized the takeover bid for 100% of Endesa shares launched by Acciona and Enel Energy Europe
(EEE) and on July 27, the Spanish Council of Ministers authorized EEE to exercise the voting rights
attaching to the shares it holds subsequent to the closure of the public tender offer made together
with Acciona.
On July 30, 2007, the acceptance period for the joint offer for Endesa shares began. It closed on
October 1, 2007. The offer price is
40.16 per share in cash.
On August 3, 2007, Enel and Acciona filed an administrative appeal against a number of the
conditions imposed by the resolution of the Board of the Spanish National Energy Commission (CNE)
dated July 4, 2007 authorizing the acquisition of Endesa shares through a public tender offer.
On September 25, 2007, the Special Shareholders Meeting of Endesa approved amendments to the
bylaws, including the removal of the ceiling on the exercise of voting rights attached to shares,
previously set at 10%. This thereby removed one of the two conditions determining the effectiveness
of the public tender offer.
Acquisition of control of Porto Empedocle regasification terminal
On July 2, 2007, following up on the agreements reached in December 2005, Enel Trade completed the
acquisition of 90% of Nuove Energie Srl, which is developing a regasification terminal at Porto
Empedocle (Agrigento).
With the acquisition, Enel confirms its objective of building a new regasification terminal, an
essential part of diversifying energy sources, boosting the flexibility of supply and enhancing the
security of Italys gas system.
Construction of the plant will involve an estimated investment of more than
600 million, with
the facility scheduled to enter service in 2011. The process of obtaining
11
authorizations is at an advanced stage, as the Ministry for the Environment has already issued a
positive environmental impact opinion for the land works and given the safety feasibility approval
envisaged under the Seveso Law.
Protocol between Enel and the Region of Sardinia on renewables and developing industry on the
island
On July 5, 2007, Enel and the Region of Sardinia signed a protocol of understanding to foster the
development of renewables and ensure supply of power at competitive prices to strategically
important enterprises that operate on the island.
Specifically, under the agreement the parties are mutually committed to expanding existing wind
plants or build new wind facilities for a total capacity of 160 MW.
Completion of acquisition of an additional stake in OGK-5
On July 11, 2007, Enel completed the acquisition of an additional 4.96% of OAO OGK-5 (OGK-5), the
Russian electricity generation company, for which about $281 million (about
210 million) was
paid on June 22. Thus, Enel indirectly owns 29.99% of the share capital of OGK-5 at September 30,
2007.
On August 16, the FAS (the Russian antitrust authority) authorized Enel to increase its stake to
100% of OGK-5. This authorization is valid for one year.
Enel-Saudi Arabia cooperation agreement
On July 20, 2007 Enel and the Saudi Arabian General Investment Authority (SAGIA) signed a
Memorandum of Understanding to foster the introduction of advanced environmentally friendly
technologies in that country and the launch of joint research and development projects in the
energy sector.
Bond issues
On July 26, 2007, the Enels Board of Directors approved the issue of one or more bonds to be
placed with institutional investors or retail investors, to be listed (in whole or in part) on one
or more regulated markets by June 30, 2008, with a total maximum amount of
10 billion. The
operation is part of the program to refinance Enels debt, in particular the
35 billion credit
facility (reduced to
30 billion in June, to
28 billion in September and to
23 billion
in October) to finance the announced public tender offer for Endesa shares.
As a result, on September 13, 2007, Enel, through its subsidiary Enel Finance International,
carried out a multi-tranche bond issue for a total value of $3.5 billion (about
2.5 billion),
structured as follows:
§
|
|
$1 billion (about
0.7 billion) 5.70% five-year fixed-rate note;
|
12
§
|
|
$1.5 billion (about
1.1 billion) 6.25% ten-year fixed-rate note;
|
§
|
|
$1 billion (about
0.7 billion) 6.80% thirty-year fixed-rate note.
|
The facility was entirely hedged with cross currency swaps that linked each tranche to a fixed rate
in euro.
The bond issue, carried out by a pool of banks, attracted subscriptions of about $6 billion, much
greater than the supply.
Investment in solar energy
On August 24, 2007 Enel announced investments of about
300 million in solar energy by 2010. The
program provides for the construction of plants with more than 35 MW of capacity, avoiding
emissions of about 30 thousand metric tons of carbon dioxide (CO
2
).
Distribution of interim dividend for 2007 approved
On September 5, 2007 the Board of Directors of Enel SpA approved the distribution of an interim
dividend of
0.20 per share. The interim dividend will be paid as from November 22, 2007, with
an ex-dividend date of November 19, 2007.
13
Subsequent events and outlook
Subsequent events
Public tender offer for Endesa
On October 5, 2007, the Comisión Nacional del Mercado de Valores announced that acceptance of the
offer amounted to 46.05% of Endesas share capital, of which 45.62% (equal to 483,060,017 shares)
was tendered in the offer in Spain and 0.43% (equal to 4,541,626 ADS) was tendered in the offer in
the United States. As a result, the other condition for the effectiveness of the tender offer,
namely the acceptance of the offer by shareholders representing more than 50% of the share capital
of Endesa including those shares already held directly and indirectly by the offerors, has been
satisfied. In accordance with the agreements between Enel and Acciona, following completion of the
takeover, Enel, through EEE, has acquired 42.08% of the share capital of Endesa (equal to
445,522,261 shares), while Acciona has acquired 3.97% (equal to 42,079,382 shares). Therefore,
following completion of the takeover bid, Enel owns 67.05% of Endesas share capital (equal to
709,923,858 shares), while Acciona directly and indirectly holds 25.01% (equal to 264,793,905
shares).
On October 18, 2007, the Board of Directors of Endesa appointed a number of new board members in
order to ensure that its composition reflects the ownership structure resulting from the outcome of
the public tender offer.
On October 22, 2007, the Spanish Ministry of Industry, Tourism and Trade partially upheld the
administrative appeal filed by Enel and Acciona against certain conditions imposed by the Spanish
National Energy Commission (CNE) on the public tender offer for Endesa.
Acquisition of further stake in OGK-5
On October 24, 2007, Enel, through its subsidiary Enel Investment Holding (EIH), entered into an
agreement for the purchase from Credit Suisse of about 2,529.4 million shares of OGK-5,
representing about 7.15% of the companys share capital, at a price of 4.2574 rubles per share, for
a total of 10,769 million rubles (equal to about
304 million).
Upon the completion of the acquisition, Enel now holds about 37.15% of OGK-5 and, having exceeded
the threshold of 30% will be required under Russian law to launch a public tender offer for the
entire share capital of the Russian generation company at a price of not less than 4.4275 rubles
per share, the latter being the highest price paid by the offeror over the last six months.
14
Acquisition of Blue Line
On October 24, 2007, Enel, through its subsidiary Enel Investment Holding, completed the
acquisition for about
1.1 million of 100% of Blue Line, a Romanian company which owns the
rights to develop wind-power projects in the Dobrogea region, with an overall future potential
capacity of about 200 MW.
The projects are under development and are expected to become operational in 2010.
Outlook
With its acquisition of 67.05% of Endesa and the strengthening of its position in Russia through
the acquisition of a stake in the OGK-5 generation company, of which Enel intends to acquire
control, Enel has substantially completed its international expansion and thus has been transformed
into a multinational company in the energy sector.
The operating cash flows generated by the companies acquired and the Enel Group as a whole will
ensure sufficient resources to meet the financial commitments associated with such operations and
to continue the dividend policy announced to the markets.
Work also continues on the programs to achieve operating excellence and growth in the domestic free
market, as well as the investment plans for research and in the area of renewable energy resources.
It is expected that the new international scale achieved and all of the activities envisaged for
the various areas will generate positive effects in 2007, with performance for the year forecast to
improve on 2006.
15
Operating review
Electricity generation and demand
Domestic electricity flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
Millions of kWh
|
|
First nine months
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross electricity generation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,545
|
|
|
|
64,883
|
|
|
|
662
|
|
|
|
1.0
|
%
|
|
- thermal
|
|
|
194,023
|
|
|
|
196,337
|
|
|
|
(2,314
|
)
|
|
|
-1.2
|
%
|
|
10,984
|
|
|
|
12,167
|
|
|
|
(1,183
|
)
|
|
|
-9.7
|
%
|
|
- hydroelectric
|
|
|
30,663
|
|
|
|
34,327
|
|
|
|
(3,664
|
)
|
|
|
-10.7
|
%
|
|
2,334
|
|
|
|
1,996
|
|
|
|
338
|
|
|
|
16.9
|
%
|
|
- geothermal and other resources
|
|
|
7,262
|
|
|
|
6,366
|
|
|
|
896
|
|
|
|
14.1
|
%
|
|
78,863
|
|
|
|
79,046
|
|
|
|
(183
|
)
|
|
|
-0.2
|
%
|
|
Total
|
|
|
231,948
|
|
|
|
237,030
|
|
|
|
(5,082
|
)
|
|
|
-2.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,192
|
)
|
|
|
(3,116
|
)
|
|
|
(76
|
)
|
|
|
-2.4
|
%
|
|
Auxiliary services consumption
|
|
|
(9,542
|
)
|
|
|
(9,716
|
)
|
|
|
174
|
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,671
|
|
|
|
75,930
|
|
|
|
(259
|
)
|
|
|
-0.3
|
%
|
|
Net electricity generation
|
|
|
222,406
|
|
|
|
227,314
|
|
|
|
(4,908
|
)
|
|
|
-2.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,535
|
|
|
|
10,697
|
|
|
|
(162
|
)
|
|
|
-1.5
|
%
|
|
Net electricity imports
|
|
|
35,724
|
|
|
|
31,386
|
|
|
|
4,338
|
|
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86,206
|
|
|
|
86,627
|
|
|
|
(421
|
)
|
|
|
-0.5
|
%
|
|
Electricity delivered to the network
|
|
|
258,130
|
|
|
|
258,700
|
|
|
|
(570
|
)
|
|
|
-0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,652
|
)
|
|
|
(2,085
|
)
|
|
|
433
|
|
|
|
20.8
|
%
|
|
Consumption for pumping
|
|
|
(5,505
|
)
|
|
|
(6,510
|
)
|
|
|
1,005
|
|
|
|
15.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,554
|
|
|
|
84,542
|
|
|
|
12
|
|
|
|
0.0
|
%
|
|
Electricity demand
|
|
|
252,625
|
|
|
|
252,190
|
|
|
|
435
|
|
|
|
0.2
|
%
|
Source: Terna Rete Elettrica Nazionale (Monthly report September 2007).
§
|
|
Domestic electricity demand
in the 3rd Quarter of 2007 was substantially in line with the
same period of 2006, while it grew 0.2% in the first nine months of 2007, reaching 252.6
billion kWh at September 30, 2007. Of this total, 85.9% was met by net domestic electricity
generation for consumption (87.6% in the first nine months of 2006), with the remaining 14.1%
being met by net electricity imports (12.4% in the first nine months of 2006);
|
|
§
|
|
net electricity imports
in the first nine months of 2007 increased by 4.3 billion kWh,
essentially owing to the decline in electricity prices in other European countries from their
high levels in early 2006, which had prompted electricity companies to reduce imports;
|
|
§
|
|
mainly as a result of higher imports and the demand for electricity in line with the same
period of last year,
gross electricity generation
declined by 5.1 billion kWh or 2.1% in the
first nine months of 2007. The period saw a decrease in hydroelectric generation (down 3.7
billion kWh) and in thermal generation (down 2.3 billion kWh), partially offset by the
increase in generation from geothermal and other sources (up 0.9 billion kWh).
|
16
Enel generation and sales
Enel generation and sales (domestic)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
|
|
|
|
Millions of kWh
|
|
First nine months
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
23,824
|
|
|
|
26,988
|
|
|
|
(3,164
|
)
|
|
|
-11.7
|
%
|
|
Net electricity generation
|
|
|
69,862
|
|
|
|
80,132
|
|
|
|
(10,270
|
)
|
|
|
-12.8
|
%
|
|
43,025
|
|
|
|
40,369
|
|
|
|
2,656
|
|
|
|
6.6
|
%
|
|
Electricity purchases
|
|
|
122,895
|
|
|
|
119,783
|
|
|
|
3,112
|
|
|
|
2.6
|
%
|
|
25,190
|
|
|
|
26,163
|
|
|
|
(973
|
)
|
|
|
-3.7
|
%
|
|
Sales to wholesalers
(1)
|
|
|
71,041
|
|
|
|
76,650
|
|
|
|
(5,609
|
)
|
|
|
-7.3
|
%
|
|
26,495
|
|
|
|
30,545
|
|
|
|
(4,050
|
)
|
|
|
-13.3
|
%
|
|
Sales on the enhanced protection and safeguard markets
(2)
|
|
|
78,035
|
|
|
|
91,824
|
|
|
|
(13,789
|
)
|
|
|
-15.0
|
%
|
|
10,126
|
|
|
|
5,364
|
|
|
|
4,762
|
|
|
|
88.8
|
%
|
|
Sales on the free
market
(2)
|
|
|
28,508
|
|
|
|
15,224
|
|
|
|
13,284
|
|
|
|
87.3
|
%
|
|
65,694
|
|
|
|
64,249
|
|
|
|
1,445
|
|
|
|
2.2
|
%
|
|
Electricity transported on Enels distribution network
(3)
|
|
|
191,642
|
|
|
|
190,551
|
|
|
|
1,091
|
|
|
|
0.6
|
%
|
|
|
|
(1)
|
|
Sales made by generation companies and sales to resellers.
|
|
(2)
|
|
Excluding sales to resellers.
|
|
(3)
|
|
Excluding power transported in the previous period but recognized commercially in the two reference periods, equal to 1.3 TWh
and 0.6 TWh in the first nine months of 2007 and the first nine months of 2006 respectively.
|
§
|
|
Enels
net domestic electricity generation
fell by 11.7% and by 12.8% in the 3rd Quarter
and in the first nine months of 2007, respectively. Specifically, the decrease in the first
nine months of 2007 was largely due to the decline in thermal generation (down 8.0 billion
kWh) and hydroelectric generation (down 2.4 billion kWh);
|
|
§
|
|
electricity purchases
grew by 2.6% in the first nine months of 2007, primarily due to the
6.6% increase in the 3rd Quarter;
|
|
§
|
|
sales to wholesalers
fell by 3.7% in the 3rd Quarter and by 7.3% in the first nine months
of the year, mainly due to the decrease in volumes sold to resellers.
|
As for overall sales to the final consumer, Enels market share in the first nine months of 2007
came to 45.1% (about 45.3% in the corresponding period of 2006). In particular:
§
|
|
sales on the enhanced protection and safeguard markets
decreased by 15.0% (13.8 billion
kWh) in the first nine months of 2007 (down 13.3% and 4.0 billion kWh in the 3rd Quarter),
primarily due to the gradual opening of the market, which gave rise to an increase of 87.3%
(13.3 billion kWh) in
sales on the free market
(up 88.8% and 4.8 billion kWh in the 3rd
Quarter);
|
|
§
|
|
total
electricity transported on Enels distribution network
in the first nine months of
2007 remained substantially in line with the same period of 2006, while it rose by 2.2% in the
3rd Quarter.
|
17
Enel generation and sales (abroad)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
|
|
|
|
Millions of kWh
|
|
First nine months
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
8,222
|
|
|
|
8,695
|
|
|
|
(473
|
)
|
|
|
-5.4
|
%
|
|
Net electricity generation
|
|
|
26,028
|
|
|
|
18,486
|
|
|
|
7,542
|
|
|
|
40.8
|
%
|
|
6,430
|
|
|
|
5,028
|
|
|
|
1,402
|
|
|
|
27.9
|
%
|
|
Electricity sold to end users
(1)
|
|
|
20,814
|
|
|
|
9,988
|
|
|
|
10,826
|
|
|
|
108.4
|
%
|
|
3,241
|
|
|
|
3,096
|
|
|
|
145
|
|
|
|
4.7
|
%
|
|
Electricity transported on Enels distribution network
|
|
|
9,438
|
|
|
|
9,318
|
|
|
|
120
|
|
|
|
1.3
|
%
|
|
|
|
(1)
|
|
Excluding sales to resellers.
|
§
|
|
Enels
net electricity generation
abroad in the first nine months of 2007 came to 26.0
billion kWh, an increase of 7.5 billion kWh, mainly attributable to the change in the scope of
consolidation as a result of the acquisitions of Slovenské elektrárne and the Panamanian
companies;
|
|
§
|
|
electricity sales
in the first nine months of 2007 increased by 10.8 billion kWh, mainly
thanks to the contribution of the Russian energy trading company RusEnergoSbyt, which has been
consolidated since the end of June 2006;
|
|
§
|
|
energy transported
in the first nine months of 2007 came to 9.4 billion kWh, broadly in
line with the figure for the corresponding period of 2006.
|
Main changes in the scope of consolidation
The scope of consolidation in the first nine months of 2007 changed with respect to the first nine
months of 2006 as a result of the following main transactions:
§
|
|
acquisition of a 66% interest in Slovenské elektrárne, a Slovakian generation company, on
April 28, 2006;
|
|
§
|
|
sale of 30% of Enel Unión Fenosa Renovables on May 30, 2006. Following this sale, the
interest in the company fell to 50%, with the Group exercising joint control over the company
together with the other shareholders. As a result, the company is being consolidated on a
proportionate basis as of that date;
|
|
§
|
|
acquisition of the remaining 40% interest in Enel Maritza East 3 (formerly Maritza East III
Power Company) on June 14, 2006. Following this transaction, the Group holds a 73% stake in
Enel Maritza East 3, a Bulgarian generation company;
|
|
§
|
|
acquisition, on June 14, 2006, of a 100% interest in Maritza O&M Holding Netherlands, a
holding company that owns 73% of Enel Operations Bulgaria (formerly Maritza East 3 Operating
Company), which is responsible for the maintenance of the Enel Maritza East 3 plant;
|
|
§
|
|
acquisition, on June 21, 2006, of a 49.5% interest in Res Holdings, which holds a 100%
stake in the Russian firm RusEnergoSbyt (energy trading and sales). Enel
|
18
|
|
now exercises joint control over the company together with the other shareholders; as a result, the company is
consolidated on a proportionate basis;
|
|
§
|
|
acquisition, on July 13, 2006, of a 100% stake in Erelis, a company that develops wind
plants in France;
|
|
§
|
|
acquisition, on August 1, 2006, of a 100% stake in Enel Panama (formerly Hydro Quebec Latin
America), which, together with Globeleq (a private equity fund), exercised joint control over
Fortuna, which is consolidated on a proportionate basis. On February 2, 2007, with the
acquisition of the entire capital of the Panamanian company Enel Fortuna (formerly Globeleq
Holdings Fortuna), Enel acquired full control of Fortuna. Accordingly, as from that date the
latter is fully consolidated;
|
|
§
|
|
acquisition, on October 6, 2006, through Enel Brasil Partecipações, a subsidiary of Enel
Latin America, of 100% of ten companies of the Rede Group that own twenty mini-hydro plants;
|
|
§
|
|
acquisition, on April 4, 2007, of a set of assets in the gas sector by Enineftegaz, a
company jointly controlled by Artic Russia (formerly Eni Russia), a joint venture in which
Enel has a stake of 40% and Eni 60%. As Enel exercises joint control, Enineftegaz is
consolidated on a proportionate basis without taking account of the possible exercise of the
call option by Gazprom;
|
|
§
|
|
acquisition, on July 2, 2007, of 90% of Nuove Energie, a company that builds and operates
LNG regasification infrastructures.
|
The balance sheet effects of the consolidation changes do not affect the comparability of the
figures for the reference periods and are discussed in the comments on results by Division.
19
Results by Division
The Domestic Sales Division, Domestic Generation and Energy Management Division, Domestic
Infrastructure and Networks Division and International Division, along with the Parent Company and
Services and Other Activities, represent the organizational structure adopted by the Group. The
results of these Divisions are considered by management in assessing Group performance.
Following the transfer of the large electricity users unit (customers with annual consumption of
more than 100 million kWh) from Enel Trade to Enel Energia, effective as of April 1, 2006, the
figures for the unit for the 1st Quarter of 2006 were reallocated from the Domestic Generation and
Energy Management Division to the Domestic Sales Division for comparative purposes.
20
Results by Division for the 3rd Quarter of 2007 and 2006
Segment information 3rd Quarter of 2007
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generat.
|
|
|
Infrastruc.
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
Eliminations
|
|
|
|
|
|
|
Domestic
|
|
|
and Energy
|
|
|
and
|
|
|
|
|
|
|
Parent
|
|
|
and Other
|
|
|
and
|
|
|
|
|
Millions of euro
|
|
Sales
|
|
|
Management
|
|
|
Networks
|
|
|
Internat.
|
|
|
Company
|
|
|
Activities
|
|
|
adjustments
|
|
|
Total
|
|
|
Revenues from third parties
|
|
|
5,434
|
|
|
|
3,233
|
|
|
|
119
|
|
|
|
1,006
|
|
|
|
151
|
|
|
|
32
|
|
|
|
(72
|
)
|
|
|
9,903
|
|
Revenues from other segments
|
|
|
15
|
|
|
|
1,326
|
|
|
|
1,274
|
|
|
|
14
|
|
|
|
60
|
|
|
|
242
|
|
|
|
(2,931
|
)
|
|
|
|
|
Total revenues
|
|
|
5,449
|
|
|
|
4,559
|
|
|
|
1,393
|
|
|
|
1,020
|
|
|
|
211
|
|
|
|
274
|
|
|
|
(3,003
|
)
|
|
|
9,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(charges) from
commodity
risk management
|
|
|
8
|
|
|
|
(68
|
)
|
|
|
|
|
|
|
91
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross operating margin
|
|
|
76
|
|
|
|
950
|
|
|
|
976
|
|
|
|
246
|
|
|
|
(36
|
)
|
|
|
38
|
|
|
|
(1
|
)
|
|
|
2,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization
and impairment losses
|
|
|
35
|
|
|
|
234
|
|
|
|
214
|
|
|
|
126
|
|
|
|
4
|
|
|
|
19
|
|
|
|
|
|
|
|
632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
41
|
|
|
|
716
|
|
|
|
762
|
|
|
|
120
|
|
|
|
(40
|
)
|
|
|
19
|
|
|
|
(1
|
)
|
|
|
1,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial
income/(expense) and
income/(expense) from
equity investments
accounted for using the
equity method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(412
|
)
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500
|
|
|
Net income (Group and
minority interests)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
705
|
|
Segment information 3rd Quarter of 2006
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generat.
|
|
|
Infrastruc.
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
Eliminations
|
|
|
|
|
|
|
Domestic
|
|
|
and Energy
|
|
|
and
|
|
|
|
|
|
|
Parent
|
|
|
and Other
|
|
|
and
|
|
|
|
|
Millions of euro
|
|
Sales
|
|
|
Management
|
|
|
Networks
|
|
|
Internat.
|
|
|
Company
|
|
|
Activities
|
|
|
adjustments
|
|
|
Total
|
|
|
Revenues from third parties
|
|
|
5,123
|
|
|
|
2,975
|
|
|
|
127
|
|
|
|
859
|
|
|
|
180
|
|
|
|
62
|
|
|
|
230
|
|
|
|
9,556
|
|
Revenues from other segments
|
|
|
15
|
|
|
|
839
|
|
|
|
1,186
|
|
|
|
2
|
|
|
|
104
|
|
|
|
210
|
|
|
|
(2,356
|
)
|
|
|
|
|
Total revenues
|
|
|
5,138
|
|
|
|
3,814
|
|
|
|
1,313
|
|
|
|
861
|
|
|
|
284
|
|
|
|
272
|
|
|
|
(2,126
|
)
|
|
|
9,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(charges) from
commodity
risk management
|
|
|
2
|
|
|
|
(182
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
(180
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross operating margin
|
|
|
12
|
|
|
|
795
|
|
|
|
788
|
|
|
|
244
|
|
|
|
41
|
|
|
|
44
|
|
|
|
(21
|
)
|
|
|
1,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and
impairment losses
|
|
|
32
|
|
|
|
247
|
|
|
|
200
|
|
|
|
80
|
|
|
|
3
|
|
|
|
21
|
|
|
|
|
|
|
|
583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
(20
|
)
|
|
|
548
|
|
|
|
588
|
|
|
|
164
|
|
|
|
38
|
|
|
|
23
|
|
|
|
(21
|
)
|
|
|
1,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial income/(expense) and
income/(expense) from equity
investments accounted for using
the equity method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(202
|
)
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
425
|
|
|
Net income (Group and minority
interests)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
693
|
|
|
|
|
(1)
|
|
Segment revenues in the above tables include both revenues from third parties and revenue
flows between the segments. An analogous approach was taken for other income and costs for the
period.
|
21
Results by Division for the first nine months of 2007 and 2006
Segment information for the first nine months of 2007
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generat.
|
|
|
Infrastruc.
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
Eliminations
|
|
|
|
|
|
|
Domestic
|
|
|
and Energy
|
|
|
and
|
|
|
|
|
|
|
Parent
|
|
|
and Other
|
|
|
and
|
|
|
|
|
Millions of euro
|
|
Sales
|
|
|
Management
|
|
|
Networks
|
|
|
Internat.
|
|
|
Company
|
|
|
Activities
|
|
|
adjustments
|
|
|
Total
|
|
|
Revenues from third parties
|
|
|
16,029
|
|
|
|
8,856
|
|
|
|
457
|
|
|
|
3,029
|
|
|
|
484
|
|
|
|
119
|
|
|
|
(214
|
)
|
|
|
28,760
|
|
Revenues from other segments
|
|
|
37
|
|
|
|
3,527
|
|
|
|
3,680
|
|
|
|
47
|
|
|
|
176
|
|
|
|
701
|
|
|
|
(8,168
|
)
|
|
|
|
|
Total revenues
|
|
|
16,066
|
|
|
|
12,383
|
|
|
|
4,137
|
|
|
|
3,076
|
|
|
|
660
|
|
|
|
820
|
|
|
|
(8,382
|
)
|
|
|
28,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(charges) from commodity risk management
|
|
|
(73
|
)
|
|
|
2
|
|
|
|
|
|
|
|
72
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross operating margin
|
|
|
191
|
|
|
|
2,861
|
|
|
|
2,758
|
|
|
|
873
|
|
|
|
(101
|
)
|
|
|
135
|
|
|
|
(6
|
)
|
|
|
6,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and impairment losses
|
|
|
173
|
|
|
|
699
|
|
|
|
634
|
|
|
|
382
|
|
|
|
12
|
|
|
|
60
|
|
|
|
|
|
|
|
1,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
18
|
|
|
|
2,162
|
|
|
|
2,124
|
|
|
|
491
|
|
|
|
(113
|
)
|
|
|
75
|
|
|
|
(6
|
)
|
|
|
4,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial income/(expense) and
income/(expense) from equity investments accounted
for using the equity method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(324
|
)
|
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (Group and minority interests)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
|
|
7,648
|
|
|
|
17,142
|
|
|
|
17,459
|
|
|
|
11,877
|
|
|
|
904
|
|
|
|
2,723
|
|
|
|
(3,611
|
)
|
|
|
54,142
|
|
Operating liabilities
|
|
|
6,166
|
|
|
|
3,892
|
|
|
|
3,617
|
|
|
|
4,192
|
|
|
|
1,458
|
|
|
|
2,296
|
|
|
|
(2,991
|
)
|
|
|
18,630
|
|
Capital expenditure
|
|
|
24
|
|
|
|
781
|
|
|
|
1,001
|
|
|
|
671
|
|
|
|
5
|
|
|
|
36
|
|
|
|
|
|
|
|
2,518
|
|
|
Segment information for the first nine months of 2006
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generat.
|
|
|
Infrastruc.
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
Eliminations
|
|
|
|
|
|
|
Domestic
|
|
|
and Energy
|
|
|
and
|
|
|
|
|
|
|
Parent
|
|
|
and Other
|
|
|
and
|
|
|
|
|
Millions of euro
|
|
Sales
|
|
|
Management
|
|
|
Networks
|
|
|
Internat.
|
|
|
Company
|
|
|
Activities
|
|
|
adjustments
|
|
|
Total
|
|
|
Revenues from third parties
|
|
|
15,848
|
|
|
|
9,537
|
|
|
|
529
|
|
|
|
2,121
|
|
|
|
695
|
|
|
|
160
|
|
|
|
(269
|
)
|
|
|
28,621
|
|
Revenues from other segments
|
|
|
66
|
|
|
|
2,182
|
|
|
|
3,551
|
|
|
|
4
|
|
|
|
171
|
|
|
|
622
|
|
|
|
(6,596
|
)
|
|
|
|
|
Total revenues
|
|
|
15,914
|
|
|
|
11,719
|
|
|
|
4,080
|
|
|
|
2,125
|
|
|
|
866
|
|
|
|
782
|
|
|
|
(6,865
|
)
|
|
|
28,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(charges) from commodity risk management
|
|
|
(4
|
)
|
|
|
(534
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
(544
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross operating margin
|
|
|
166
|
|
|
|
2,653
|
|
|
|
2,524
|
|
|
|
617
|
|
|
|
175
|
|
|
|
141
|
|
|
|
(12
|
)
|
|
|
6,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from equity exchange transaction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
263
|
|
|
|
|
|
|
|
|
|
|
|
263
|
|
Depreciation, amortization and impairment losses
|
|
|
81
|
|
|
|
684
|
|
|
|
602
|
|
|
|
202
|
|
|
|
10
|
|
|
|
63
|
|
|
|
|
|
|
|
1,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
85
|
|
|
|
1,969
|
|
|
|
1,922
|
|
|
|
415
|
|
|
|
428
|
|
|
|
78
|
|
|
|
(12
|
)
|
|
|
4,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial income/(expense) and
income/(expense) from equity investments accounted
for using the equity method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(491
|
)
|
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (Group and minority interests)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
(2)
|
|
|
6,948
|
|
|
|
16,752
|
|
|
|
16,875
|
|
|
|
10,008
|
|
|
|
1,013
|
|
|
|
1,771
|
|
|
|
(3,352
|
)
|
|
|
50,015
|
|
Operating liabilities
(2)
|
|
|
6,272
|
|
|
|
4,019
|
|
|
|
4,042
|
|
|
|
4,037
|
|
|
|
1,275
|
|
|
|
1,128
|
|
|
|
(2,884
|
)
|
|
|
17,889
|
|
Capital expenditure
|
|
|
22
|
|
|
|
526
|
|
|
|
979
|
|
|
|
228
|
|
|
|
3
|
|
|
|
37
|
|
|
|
|
|
|
|
1,795
|
|
|
|
|
(1)
|
|
Segment revenues in the above tables include both revenues from third parties and revenue
flows between the segments. An analogous approach was taken for other income and costs for the
period.
|
|
(2)
|
|
Figures at December 31, 2006.
|
22
The following table reconciles consolidated assets and liabilities and the segment figures.
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
|
|
|
|
|
at Sept. 30, 2007
|
|
|
at Dec. 31, 2006
|
|
|
Total assets
|
|
|
73,341
|
|
|
|
54,500
|
|
Financial assets, cash and cash equivalents
|
|
|
15,871
|
|
|
|
2,107
|
|
Tax assets
|
|
|
3,328
|
|
|
|
2,378
|
|
Segment assets
|
|
|
54,142
|
|
|
|
50,015
|
|
-
of which
:
|
|
|
|
|
|
|
|
|
Domestic Sales
|
|
|
7,648
|
|
|
|
6,948
|
|
Domestic Generation and Energy Management
|
|
|
17,142
|
|
|
|
16,752
|
|
Domestic Infrastructure and Networks
|
|
|
17,459
|
|
|
|
16,875
|
|
International
|
|
|
11,877
|
|
|
|
10,008
|
|
Parent Company
|
|
|
904
|
|
|
|
1,013
|
|
Services and Other Activities
|
|
|
2,723
|
|
|
|
1,771
|
|
Eliminations and adjustments
|
|
|
(3,611
|
)
|
|
|
(3,352
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
54,365
|
|
|
|
35,475
|
|
Loans and other financial liabilities
|
|
|
30,535
|
|
|
|
14,661
|
|
Tax liabilities
|
|
|
5,200
|
|
|
|
2,925
|
|
Segment liabilities
|
|
|
18,630
|
|
|
|
17,889
|
|
-
of which
:
|
|
|
|
|
|
|
|
|
Domestic Sales
|
|
|
6,166
|
|
|
|
6,272
|
|
Domestic Generation and Energy Management
|
|
|
3,892
|
|
|
|
4,019
|
|
Domestic Infrastructure and Networks
|
|
|
3,617
|
|
|
|
4,042
|
|
International
|
|
|
4,192
|
|
|
|
4,037
|
|
Parent Company
|
|
|
1,458
|
|
|
|
1,275
|
|
Services and Other Activities
|
|
|
2,296
|
|
|
|
1,128
|
|
Eliminations and adjustments
|
|
|
(2,991
|
)
|
|
|
(2,884
|
)
|
23
Domestic Sales
The Domestic Sales Division is responsible for commercial activities, with the objective of
creating an integrated package of electricity and gas products and services for end users. The
activities are carried out by:
|
|
Enel Distribuzione and Deval (the operations of the latter are limited to the Valle dAosta
region) for the sale of electricity on the enhanced protection and safeguard markets;
|
|
|
|
Enel Energia (formerly Enel Gas) for the sale of electricity on the free market and the
sale of natural gas to end users;
|
|
|
|
Enel.si, which is responsible for engineering and franchising.
|
Regulatory and rate issues
Electricity
Rates and rate updates
With Resolution no. 237/07 of September 27, 2007, the Authority for Electricity and Gas established
the new dual on-peak/off-peak charges, differentiating between the hours in the F1 time band and
those in the F2 and F3 time bands. End users covered by the enhanced protection system and equipped
with the appropriate meters, and all customers who had already opted for on-peak/off-peak rates by
July 1, 2007 will be able to select the new terms of supply commencing October 1, 2007.
With Resolution no. 238/07 of September 27, 2007, the Authority updated electricity rates and price
terms for the enhanced protection system for the October-December 2007 quarter, increasing the
average charge to end users by about
3.8/MWh, or 2.4%. In particular, the Authority raised the
rate component covering the cost of raw material and ancillary services by 5.6% (up
5.1/MWh)
and lowered the UC1 component, covering past deficits, by about 24% (down
1.3/MWh).
Rules for the sale of CIP 6 electricity by the Electricity Services Operator (ESO)
The decree of the Minister for Economic Development of December 14, 2006 confirmed for 2007 the
sale of CIP 6 energy on the Power Exchange by the ESO and the pro rata assignment of such energy to
those requesting it, using contracts for differences, based on average annual electricity
consumption. The decree reduced the share going to the Single Buyer to 35%, while the strike price
of the contracts for differences was set at
64/MWh for the 1st Quarter of 2007 and is adjusted
during the year in the manner specified by the Authority for Electricity and Gas in relation to
developments in the price index referred to in Article 5 of the decree of the Minister for
Productive Activities of December 19, 2003. The total quantity assigned for 2007 was 5,400 MW, of
which
24
3,510 MW to the free market (639 MW to Enel) and 1,890 MW to the enhanced protection and
safeguard markets.
In Resolution no. 82/07, the Authority also established procedures for adjusting the price for the
sale of CIP 6 energy on a quarterly basis. The price was set at
59.94/MWh for the 2nd Quarter
of 2007,
53.64/MWh for the 3rd Quarter and
62.60/MWh for the 4th Quarter.
Gas
Rates and rate updates
With Resolution no. 240/07, the Authority for Electricity and Gas updated the natural gas sale cost
component (QVD), increasing it by 11.7%. The Authority also announced a subsequent measure
systematically revising the remuneration procedures for retail sales activity, both in terms of the
level of recognized costs and the breakdown of the price component to cover such costs.
With Resolution no. 242/07, the Authority updated the rates for natural gas supplies for the 4th
Quarter of 2007 in accordance with the method introduced in Resolution no. 134/06, raising the raw
materials component by 5.7% compared with the previous quarter.
Supplier of last resort
On September 21, 2007, Enel filed an application to participate in the open procedure to select
natural gas suppliers of last resort for thermal year 2007-2008. Such suppliers are responsible for
ensuring natural gas supplies to end users with a consumption of less than 200,000 cubic meters who
have been left without a supplier for reasons beyond their control. The procedure identifies a
supplier of last resort for each of the five supply macro-areas into which the country is divided.
The retail companies thus selected undertake to supply a specific annual quantity of gas at the
price bid in the tender.
With Resolution no. 243/07, the Authority published the ranking of bids, which identifies Enel
Energia as supplier of last resort for a maximum quantity of gas totaling 30 million cubic meters
in the Emilia Romagna, Liguria, Tuscany, Umbria, Marche and upper Lazio macro-area.
25
Operating performance of the Domestic Sales Division
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3rd Quarter
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Millions of euro
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First nine months
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2007
|
|
|
2006
|
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Change
|
|
|
|
|
2007
|
|
|
2006
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|
Change
|
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|
5,449
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|
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|
5,138
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|
|
|
311
|
|
|
Revenues
|
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|
16,066
|
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15,914
|
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|
152
|
|
|
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|
|
|
|
|
|
|
|
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Net income/(charges) from
|
|
|
|
|
|
|
|
|
|
|
|
|
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(8
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)
|
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|
2
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|
(6
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)
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|
commodity risk management
|
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|
(73
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)
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(4
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)
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(69
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)
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76
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12
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(64
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)
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Gross operating margin
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191
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|
166
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25
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41
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(20
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)
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61
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Operating income
|
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18
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|
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85
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(67
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)
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Operating assets
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7,648
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6,948
|
(1)
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|
700
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Operating liabilities
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6,166
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6,272
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(1)
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(106
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)
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Employees at period-end (no.)
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4,991
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5,176
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(1)
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(185
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)
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Capital expenditure
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24
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22
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2
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(1) At December 31, 2006.
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Electricity sales
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3rd Quarter
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Millions of kWh
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First nine months
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2007
|
|
|
2006
|
|
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Change
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|
2007
|
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|
2006
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Sales on enhanced
protection and
safeguard markets:
|
|
|
|
|
|
|
|
|
|
|
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|
|
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1,212
|
|
|
|
1,198
|
|
|
|
14
|
|
|
|
1.2
|
%
|
|
- high-voltage
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3,526
|
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|
|
3,649
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(123
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)
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-3.4
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%
|
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2,503
|
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|
|
4,143
|
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(1,640
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)
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-39.6
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%
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- medium-voltage
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7,576
|
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|
12,556
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(4,980
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)
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-39.7
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%
|
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22,780
|
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25,204
|
|
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(2,424
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)
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-9.6
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%
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- low-voltage
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66,933
|
|
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75,619
|
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(8,686
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)
|
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-11.5
|
%
|
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26,495
|
|
|
|
30,545
|
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|
(4,050
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)
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-13.3
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%
|
|
Total
|
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|
78,035
|
|
|
|
91,824
|
|
|
|
(13,789
|
|
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|
-15.0
|
%
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Sales on free market:
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|
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|
|
|
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3,183
|
|
|
|
2,749
|
|
|
|
434
|
|
|
|
15.8
|
%
|
|
- high-voltage
|
|
|
10,251
|
|
|
|
8,779
|
|
|
|
1,472
|
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|
|
16.8
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%
|
|
3,370
|
|
|
|
1,842
|
|
|
|
1,528
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|
|
|
83.0
|
%
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|
- medium-voltage
|
|
|
9,452
|
|
|
|
4,764
|
|
|
|
4,688
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|
|
|
98.4
|
%
|
|
3,573
|
|
|
|
773
|
|
|
|
2,800
|
|
|
|
|
|
|
- low-voltage
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|
|
8,805
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|
1,681
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|
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7,124
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|
|
|
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10,126
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|
|
|
5,364
|
|
|
|
4,762
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|
|
88.8
|
%
|
|
Total
|
|
|
28,508
|
|
|
|
15,224
|
|
|
|
13,284
|
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|
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87.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
36,621
|
|
|
|
35,909
|
|
|
|
712
|
|
|
|
2.0
|
%
|
|
TOTAL
|
|
|
106,543
|
|
|
|
107,048
|
|
|
|
(505
|
)
|
|
|
-0.5
|
%
|
Electricity sold on the enhanced protection and safeguard markets in the first nine months amounted
to 78.0 billion kWh, down 13.8 billion kWh from the same period of the previous year, owing
primarily to the increase in market liberalization, which led to an increase of 13.3 billion kWh in
the volume of energy sold on the free market over the year-earlier period.
26
Gas sales and customers
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|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
|
|
First nine months
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas sold
(millions of cubic meters)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
242
|
|
|
|
261
|
|
|
|
(19
|
)
|
|
Enel Group network
|
|
|
1,752
|
|
|
|
2,308
|
|
|
|
(556
|
)
|
|
269
|
|
|
|
203
|
|
|
|
66
|
|
|
Third-party network
|
|
|
1,146
|
|
|
|
890
|
|
|
|
256
|
|
|
511
|
|
|
|
464
|
|
|
|
47
|
|
|
Total
|
|
|
2,898
|
|
|
|
3,198
|
|
|
|
(300
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
Customers at end of period
(no.)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enel Group network
|
|
|
1,949,141
|
|
|
|
1,959,740
|
|
|
|
(10,599
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-party network
|
|
|
484,647
|
|
|
|
329,162
|
|
|
|
155,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,433,788
|
|
|
|
2,288,902
|
|
|
|
144,886
|
|
Gas sales for the 3rd Quarter of 2007 totaled 511 billion cubic meters, a figure largely in line
with sales in the same period of the previous year; the first nine months show a decline of 300
million cubic meters, due primarily to the negative effect of the mild weather encountered during
the 1st Quarter of 2007.
At September 30, 2007, customers served numbered some 2.4 million, an increase of about 0.1 million
over the year due largely to the increase in retail customers (those with consumption of less than
200,000 cubic meters per year).
Operating performance in the 3rd Quarter of 2007
Revenues
for the 3rd Quarter of 2007 came to
5,449 million, an increase of
311 million (up
6.1%) over the same period in 2006 due to the following main factors:
§
|
|
a
629 million increase in revenues on the free electricity market from increased sales
to small and medium-sized customers;
|
|
§
|
|
an
11 million increase in revenues on the natural gas market due primarily to the
positive effect of Resolution no. 79/07, which definitively established gas supply prices for
2005 and 2006;
|
|
§
|
|
a
348 million decrease in revenues on the enhanced protection and safeguard markets,
mainly attributable to the reduction in quantities sold (down 4.1 TWh).
|
The
g
ross operating margin
for the 3rd Quarter of 2007 totaled
76 million, an increase of
64 million over the same period of 2006. This increase can be attributed to:
§
|
|
a
49 million increase in the electricity margin on the enhanced protection and
safeguard markets, attributable primarily to the impact of the implementation of Resolution
no. 156/07, which modified, among other things, the equalization mechanism applicable to
energy purchases for the safeguard service commencing July 1, 2007. This impact was
accompanied by the improved margin generated
|
27
|
|
over the quarter by the change in developments in
electricity sales compared with the same period in the previous year;
|
§
|
|
a
22 million increase in the electricity margin on the free market, primarily due to
the higher volumes sold;
|
|
§
|
|
an
18 million increase in the margin on natural gas sales to end users, mainly due to
the implementation of Resolution no. 79/07;
|
|
§
|
|
higher operating costs totaling
25 million, primarily incurred on the free electricity
and gas market.
|
Operating income
for the 3rd Quarter of 2007, after depreciation, amortization and impairment
losses amounting to
35 million (
32 million in the same period of the previous year),
totaled
41 million, up
61 million on the 3rd Quarter of 2006.
Operating performance in the first nine months of 2007
Revenues
for the first nine months of 2007 came to
16,066 million, up
152 million (1.0%) on
the same period in 2006 owing to the following main factors:
§
|
|
a
1,770 million increase in revenues on the free electricity market attributable to
increased sales to small and medium-sized users, largely as a result of customer acquisition
campaigns;
|
|
§
|
|
a
10 million increase in revenues on the natural gas market due primarily to the
positive impact of the implementation of Resolution no. 79/07, which more than offset the
decline in revenues caused by the reduction in quantities sold;
|
|
§
|
|
a
1,597 million decrease in revenues on the enhanced protection and safeguard markets,
primarily attributable to the reduction in quantities sold (down 13.8 TWh).
|
The
gross operating margin
for the first nine months of 2007 totaled
191 million, up
25
million on year-earlier period. The increase can be attributed to:
§
|
|
a
62 million increase in the electricity margin on the free market, largely the result
of the greater volumes sold;
|
|
§
|
|
a
60 million increase in the margin on natural gas sales to end users due primarily to
the impact of Resolution no. 79/07;
|
|
§
|
|
a
16 million increase in the electricity margin on the enhanced protection and
safeguard markets, primarily the result of the implementation of Resolution no. 156/07,
partially offset by the negative impact of domestic equalization (being recouped in the 2nd
Half of the year) due to different developments in electricity sales compared with the same
period of the previous year;
|
|
§
|
|
a decrease in the margin associated with prior-year items posted in the 1st Half of 2006 in
respect of electricity purchases in previous years (
71 million), payment of
|
28
|
|
a refund on
lower gas sales (
15 million), and the charge, recognized in the first nine months of 2007,
resulting from the fine imposed with Resolution no. 66/07 (
12 million);
|
|
§
|
|
higher operating costs totaling
15 million, primarily incurred on the free electricity
and gas market.
|
Operating income
for the first nine months of 2007, after depreciation, amortization and impairment
losses amounting to
173 million (
81 million for the same period in 2006), stood at
18
million, down
67 million on the same period of 2006. The increase in depreciation, amortization
and impairment losses is primarily attributable to increased impairment losses on trade receivables
recognized in the 1st Half of 2007.
Capital expenditure
Capital expenditure
totaled
24 million, up
2 million on the first nine months of 2006.
29
Domestic Generation and Energy Management
This Division operates in the field of electricity generation and energy products. The activities
of the Domestic Generation and Energy Management Division are as follows:
§
|
|
Generation and sale of electricity:
|
|
-
|
|
electricity generation in Italy through Enel Produzione;
|
|
|
-
|
|
trading on international and domestic markets through Enel Trade.
|
§
|
|
Provisioning and sale of energy products through Enel Trade:
|
|
-
|
|
provisioning for all of the Groups needs;
|
|
|
-
|
|
sale of natural gas to distributors.
|
§
|
|
Engineering and construction through Enel Produzione.
|
Regulatory issues
Ancillary Services Market (ASM)
With Resolution no. 130/07, the Authority for Electricity and Gas approved Ternas proposal
concerning procedures for concluding forward contracts on the ASM relating to 2007. In September,
Terna conducted the first competitive procedures for forward products on the ASM, in which Enel
Produzione declined to bid.
Single Buyer auctions
The Single Buyer held further auctions for contracts for bilateral contracts with base-load
profiles (that is, with a constant profile across all the hours in a year) in September 2007 in
order to cover requirements for the three-year period from 2008 through 2010; Enel Produzione was
allocated 150 MW for 2008.
Temporary measures concerning the reduction of gas consumption
In order to lower the risk of a system crisis, the Minister for Economic Development, with the
decree of September 11, 2007, made it mandatory to maximize gas imports commencing November 5, 2007
through March 31, 2008 and defined the quantities of gas not imported as a result of failure to use
the capacity granted and not transferred to third parties as unauthorized drawing on strategic
stocks.
The Minister for Economic Development also adopted a new procedure for containing gas consumption
in the event of emergencies, which provides for:
§
|
|
the mandatory participation of all industrial customers in consumption reduction;
|
|
§
|
|
the voluntary participation of other end users, provided they have daily metering;
|
|
§
|
|
the exclusion of electricity generators and all other end users from consumption reduction,
but not from the levy to fund the procedure;
|
|
§
|
|
entitlement of mandatory participants to take part either on an individual basis or jointly
through their gas vendor; in the latter case, the sales company is responsible
|
30
|
|
for the overall
consumption containment achieved and may agree specific contract clauses regarding the
distribution of bonuses and penalties, for which activity the sales companies receive an
incentive established by the Authority for Electricity and Gas.
|
The Authority is responsible for establishing the size of the levy for which ineligible users are
liable and the procedures for awarding incentives and imposing penalties.
Emissions trading
As regards the Emissions Trading Scheme (ETS), on May 15, 2007, the European Commission published
its decision regarding Italys national plan for allocating greenhouse gas emissions allowances for
2008-2012, which Italy had presented on December 18, 2006 (in accordance with Directive 2003/87/EC
of the European Parliament and the Council).
Approval of the plan is contingent upon making a number of corrections that have been expressly
requested by the European Commission. In particular, Italy will need to:
§
|
|
reduce the total average annual cap from 209 million metric tons of CO
2
to 195.7
million metric tons, a reduction of 6.3%;
|
|
§
|
|
reduce from 25% to 15% the total maximum quantity of the allowances allocated to each CER
and ERU plant (credits from the flexible clean development mechanisms CDMs and joint
implementation JI that make it possible to account for reductions in CO
2
emissions resulting from projects in foreign countries for the purposes of meeting the Kyoto
Protocol requirements) that Italian operators can use to cover their emissions;
|
|
§
|
|
provide more information concerning the treatment of new entrants to the emissions
allowance trading system;
|
|
§
|
|
add combustion plants to the plan, as the other Member States do.
|
The process of implementing the Commission decision and preparing the final allocation is still
under way and is not expected to be completed before Fall 2007. There continues to be a great deal
of uncertainty surrounding the actual cap available for the thermal segment. Enel has filed an
appeal with the Regional Administrative Court against the national allocation plan submitted to the
Commission, disputing, in particular, its discriminatory treatment of coal-fired plants.
For the first nine months of 2007, emissions produced by Enel Produzione totaled 33.6 million
metric tons. Allocating 31.6 million metric tons of allowances
pro rata temporis
for this period
(estimating the monthly portion of the annual allowance allocated) and considering the purchases of
allowances in the period (of 1.6 million metric tons),
31
as well as the surplus at the start of the
period of 0.2 million metric tons, the residual deficit at September 30, 2007 came to 0.2 million
metric tons. Said deficit is entirely covered by forward purchases with delivery in December 2007.
Operating performance of the Domestic Generation and Energy Management Division
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
Millions of euro
|
|
First nine months
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
4,559
|
|
|
|
3,814
|
|
|
|
745
|
|
|
Revenues
|
|
|
12,383
|
|
|
|
11,719
|
|
|
|
664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(charges) from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(68
|
)
|
|
|
(182
|
)
|
|
|
114
|
|
|
commodity risk management
|
|
|
2
|
|
|
|
(534
|
)
|
|
|
536
|
|
|
950
|
|
|
|
795
|
|
|
|
155
|
|
|
Gross operating margin
|
|
|
2,861
|
|
|
|
2,653
|
|
|
|
208
|
|
|
716
|
|
|
|
548
|
|
|
|
168
|
|
|
Operating income
|
|
|
2,162
|
|
|
|
1,969
|
|
|
|
193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
|
|
17,142
|
|
|
|
16,752
|
(1)
|
|
|
400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating liabilities
|
|
|
3,892
|
|
|
|
4,019
|
(1)
|
|
|
(127
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees at period-end (no.)
|
|
|
9,518
|
|
|
|
9,573
|
(1)
|
|
|
(55
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
781
|
|
|
|
526
|
|
|
|
255
|
|
|
(1) At December 31, 2006.
|
Net electricity generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
|
|
|
Millions of kWh
|
|
|
First nine months
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
16,499
|
|
|
|
18,955
|
|
|
|
(2,456
|
)
|
|
-13.0
|
%
|
|
Thermal
|
|
|
48,606
|
|
|
|
56,599
|
|
|
|
(7,993
|
)
|
|
|
-14.1
|
%
|
|
5,945
|
|
|
|
6,659
|
|
|
|
(714
|
)
|
|
-10.7
|
%
|
|
Hydroelectric
|
|
|
17,015
|
|
|
|
19,369
|
|
|
|
(2,354
|
)
|
|
|
-12.2
|
%
|
|
1,286
|
|
|
|
1,294
|
|
|
|
(8
|
)
|
|
-0.6
|
%
|
|
Geothermal
|
|
|
3,901
|
|
|
|
3,853
|
|
|
|
48
|
|
|
|
1.2
|
%
|
|
94
|
|
|
|
80
|
|
|
|
14
|
|
|
17.5
|
%
|
|
Other resources
|
|
|
340
|
|
|
|
311
|
|
|
|
29
|
|
|
|
9.3
|
%
|
|
|
|
23,824
|
|
|
|
26,988
|
|
|
|
(3,164
|
)
|
|
-11.7
|
%
|
|
Total
|
|
|
69,862
|
|
|
|
80,132
|
|
|
|
(10,270
|
)
|
|
|
-12.8
|
%
|
In the first nine months of 2007, net electricity generation totaled 69,862 million kWh, down 12.8%
on the same period in 2006. More specifically, thermal generation posted a decline of 7,993 million
kWh, while hydroelectric generation fell by 2,354 million kWh owing to low water availability in
the period.
In the 3rd Quarter of 2007, the decrease in net generation was primarily attributable to
hydroelectric generation, which was down by 2,456 million kWh.
32
Contribution to gross thermal generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
Millions of kWh
|
|
First nine months
|
|
|
2007
|
|
|
2006
|
|
|
|
|
2007
|
|
|
2006
|
|
|
|
668
|
|
|
|
3.8
|
%
|
|
|
1,016
|
|
|
|
5.1
|
%
|
|
High-sulfur fuel oil (S>0.25%)
|
|
|
1,882
|
|
|
|
3.6
|
%
|
|
|
6,756
|
|
|
|
11.2
|
%
|
|
685
|
|
|
|
3.9
|
%
|
|
|
1,679
|
|
|
|
8.3
|
%
|
|
Low-sulfur fuel oil (S<0.25%)
|
|
|
2,840
|
|
|
|
5.5
|
%
|
|
|
6,500
|
|
|
|
10.8
|
%
|
|
1,353
|
|
|
|
7.7
|
%
|
|
|
2,695
|
|
|
|
13.4
|
%
|
|
Total fuel oil
|
|
|
4,722
|
|
|
|
9.1
|
%
|
|
|
13,256
|
|
|
|
22.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,232
|
|
|
|
52.4
|
%
|
|
|
10,110
|
|
|
|
50.1
|
%
|
|
Natural gas
|
|
|
24,856
|
|
|
|
48.0
|
%
|
|
|
25,529
|
|
|
|
42.3
|
%
|
|
6,931
|
|
|
|
39.3
|
%
|
|
|
7,280
|
|
|
|
36.1
|
%
|
|
Coal
|
|
|
21,995
|
|
|
|
42.4
|
%
|
|
|
21,392
|
|
|
|
35.4
|
%
|
|
104
|
|
|
|
0.6
|
%
|
|
|
85
|
|
|
|
0.4
|
%
|
|
Other fuels
|
|
|
254
|
|
|
|
0.5
|
%
|
|
|
183
|
|
|
|
0.3
|
%
|
|
|
|
17,620
|
|
|
|
100.0
|
%
|
|
|
20,170
|
|
|
|
100.0
|
%
|
|
TOTAL
|
|
|
51,827
|
|
|
|
100.0
|
%
|
|
|
60,360
|
|
|
|
100.0
|
%
|
Gross thermal power generation fell by 14.1% year-on-year in the first nine months of 2007. The
largest share of power generation for both periods was accounted for by gas-fired plants. The
contribution to generation made by gas remained virtually unchanged in the two periods under
examination owing primarily to the increase in the output of nearly all combined-cycle plants,
which was partially offset by a reduction in natural-gas-fired power generation at the conventional
oil/gas condensation plants. Coal-fired generation increased 2.8% in the first nine months, owing
primarily to the greater availability of the La Spezia and Sulcis plants, which offset the negative
impact of downtime due to environmental upgrading.
Fuel-oil generation fell sharply (down 64.4%) in the first nine months of 2007, owing primarily to
the decline in conventional oil/gas plant operation as compared with the same period in 2006, when
the gas crisis made it possible to use such plants more than usual, along with the use of a number
of high-sulfur fuel-oil plants.
Operating performance in the 3rd Quarter of 2007
Revenues
for the 3rd Quarter of 2007 came to
4,559 million, an increase of
745 million or
19.5% over the same period in 2006 due to the following main factors:
§
|
|
a
661 million increase in revenues on energy sales to other Divisions of the Group,
mainly the Domestic Sales Division, which was partially offset by a
134 million decline in
revenues due to the reduction in the Divisions operations on the domestic free market;
|
|
§
|
|
a
165 million increase in revenues from electricity sales on the Power Exchange
resulting from an increase in volumes sold. The rise was partially offset by a
16 million
decline in sales of CIP 6 energy due to the ending of incentives for a number of plants;
|
|
§
|
|
a
70 million increase in revenues for contract work in progress, primarily engineering
and construction work commissioned by International Division companies;
|
33
§
|
|
a
23 million increase in revenues from electricity trading on international markets
resulting from the higher volumes traded (up 2.1 TWh), which more than offset the decline in
foreign sale prices;
|
|
§
|
|
a
31 million decline in revenues from fuel trading due to the
33 million decrease
in gas sales, partly offset by the
2 million increase in sales of other fuels.
|
The
gross operating margin
for the 3rd Quarter of 2007 came to
950 million, up
155 million
or 19.5% on the
795 million posted for the year-earlier period. The increase is primarily
attributable to the improved generation margin (up
150 million).
Operating income
for the 3rd Quarter of 2007 amounted to
716 million, up
168 million or
30.7% on the 3rd Quarter of 2006, a fact attributable to the increased gross operating margin and
to a
13 million decrease in depreciation, amortization and impairment losses.
Operating performance in the first nine months
Revenues
for the first nine months of 2007 came to
12,383 million, up
664 million or 5.7%
on the same period of the previous year, owing mainly to the following factors:
§
|
|
a
1,259 million increase in energy sales to other Divisions of the Group, mainly the
Domestic Sales Division, which was partially offset by a
281 million decline in revenues
due to the reduction in the Divisions operations on the domestic free market;
|
|
§
|
|
a
153 million increase in revenues for contract work in progress, primarily engineering
and construction work commissioned by International Division companies;
|
|
§
|
|
an
82 million increase in revenues from electricity trading on the international
markets, reflecting the greater volumes traded (up 1.9 TWh);
|
|
§
|
|
a
252 million decline in revenues from fuel trading resulting from the
235 million
decrease in gas sale revenues and the
17 million decline in sales of other fuels;
|
|
§
|
|
a
42 million decrease in revenues from electricity sales on the Power Exchange, largely
due to a decline in sales prices, which was partly offset by the larger quantities sold in the
2nd and 3rd Quarters of 2007. This decrease was accompanied by an
86 million decline in
sales of CIP 6 energy mainly due to the ending of incentives for a number of plants;
|
|
§
|
|
the recognition in the first nine months of 2006 of prior-year items relating to
electricity generated by minor plants (less than 10 MVA) in the amount of
39 million, as
well as
92 million relating to implementation of the settlement with Siemens (
51
million) and the settlement of prior-year items with the ISO, now Terna (
41 million).
|
34
The
gross operating margin
for the first nine months of 2007 came to
2,861 million, up
208
million or 7.8% on the
2,653 million posted for the same period in 2006. This increase was
largely attributable to the change in the fair value of contracts for differences (up
106
million) and the improvement in the generation margin (up
194 million), which was partially
offset by the lower contribution made by past items (mentioned in the section on revenues)
recognized in the same period of 2006 (
92 million).
Operating income
for the first nine months of 2007 came to
2,162 million, an increase of
193 million (up 9.8%) on the same period in 2006 that may primarily be attributed to the
increase in gross operating margin, partially offset by the
27 million reversal in 2006 of
certain provisions set aside in previous years for impairment losses.
Capital expenditure
Capital expenditure
totaled
781 million and chiefly regarded the continuation of projects on
the thermal plants in the amount of
571 million (including the conversion to coal of the
Torrevaldaliga Nord plant for
380 million), works at various hydroelectric plants for
117
million, and work on the geothermal generation plants in the amount of
59 million (including
14 million for drilling as part of the mining activities for new geothermal generation
development opportunities) and wind plants for
14 million.
35
Domestic Infrastructure and Networks
The Domestic Infrastructure and Networks Division is responsible for operating the electricity and
gas distribution networks.
The activities are carried out by:
§
|
|
Enel Distribuzione and Deval (the latters operations are limited to the Valle dAosta
region) for the distribution of electricity to the free and enhanced protection and safeguard
markets;
|
|
§
|
|
Enel Rete Gas for the distribution of gas;
|
|
§
|
|
Enel Sole for public and artistic lighting.
|
Regulatory and rate issues
Electricity
Regulatory issues
With regard to service quality, the Authority for Electricity and Gas initiated a second
consultation in August 2007, which confirmed the introduction of regulation of the number of
service interruptions alongside current regulation of the accumulated duration of interruptions.
Initial proposals regarding the targets of this new form of regulation and the parameters for
calculating the associated bonuses and penalties were also put forward on the same occasion. In the
same period, the Authority also launched an initial consultation on the setting of transmission,
distribution and metering rates, also defining the general criteria for regulation, which continue
those for the current regulatory period.
The measure is expected to be adopted before the end of the year, once a second consultation
process has been completed.
Administrative and accounting unbundling
With Resolution no. 11/07, the Authority for Electricity and Gas approved the integrated text of
measures regarding administrative and accounting unbundling requirements for companies operating in
the electricity and gas industry and the related publication and notification requirements.
The measure extends and amends the previous rules governing administrative and accounting
unbundling (Resolutions nos. 310/01 and 311/01), establishing rules for functional separation in
order to ensure, among other things, the independence of the managers who operate essential
infrastructure. Enel filed an appeal against the Resolution no. 11/07 (limited to Article 11
concerning the independence of the directors) with the Regional Administrative Court, but
subsequently withdrew it in the wake of the
36
amendments to the resolution in question introduced by
the Authority with Resolution no. 253/07 of October 4, 2007 The current rules safeguard the
decision-making autonomy of the distribution company from the vertically integrated corporation in
its operating, management and network development decisions, albeit leaving the holding company
and, hence, shareholders the right of control over such activities.
Decree Law 73 of June 18, 2007, ratified with Law 125 of August 3, 2007, requires, among other
things, the corporate separation of sales activities from those of electricity distribution, to be
implemented within 180 days. Enel has set up separate sales companies for Enel Distribuzione and Deval users, which will
be in operation by the deadline laid down in the decree law.
Gas
Rates and rate updates
With Resolution no. 125/07, the Authority for Electricity and Gas approved the Enel Rete Gas
distribution rates for thermal years 2005-2006 and 2006-2007. Resolution no. 241/07 provided for an
increase in the transport service component in the natural gas general supply terms.
Operating performance of the Domestic Infrastructure and Networks Division
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
Millions of euro
|
|
|
First nine months
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electricity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,349
|
|
|
|
1,279
|
|
|
|
70
|
|
|
Revenues
|
|
|
3,924
|
|
|
|
3,882
|
|
|
|
42
|
|
|
964
|
|
|
|
788
|
|
|
|
176
|
|
|
Gross operating margin
|
|
|
2,647
|
|
|
|
2,440
|
|
|
|
207
|
|
|
773
|
|
|
|
607
|
|
|
|
166
|
|
|
Operating income
|
|
|
2,081
|
|
|
|
1,894
|
|
|
|
187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44
|
|
|
|
34
|
|
|
|
10
|
|
|
Revenues
|
|
|
213
|
|
|
|
198
|
|
|
|
15
|
|
|
12
|
|
|
|
|
|
|
|
12
|
|
|
Gross operating margin
|
|
|
111
|
|
|
|
84
|
|
|
|
27
|
|
|
(11
|
)
|
|
|
(19
|
)
|
|
|
8
|
|
|
Operating income
|
|
|
43
|
|
|
|
28
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,393
|
|
|
|
1,313
|
|
|
|
80
|
|
|
Revenues
|
|
|
4,137
|
|
|
|
4,080
|
|
|
|
57
|
|
|
976
|
|
|
|
788
|
|
|
|
188
|
|
|
Gross operating margin
|
|
|
2,758
|
|
|
|
2,524
|
|
|
|
234
|
|
|
762
|
|
|
|
588
|
|
|
|
174
|
|
|
Operating income
|
|
|
2,124
|
|
|
|
1,922
|
|
|
|
202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
|
|
17,459
|
|
|
|
16,875
|
(1)
|
|
|
584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating liabilities
|
|
|
3,617
|
|
|
|
4,042
|
(1)
|
|
|
(425
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees at period-end (no.)
|
|
|
23,056
|
|
|
|
24,701
|
(1)
|
|
|
(1,645
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
1,001
|
|
|
|
979
|
|
|
|
22
|
|
|
(1) At December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
37
Operating performance in the 3rd Quarter of 2007
Total
revenues
came to
1,393 million for the 3rd Quarter of 2007, up
80 million or 6.1% on
the same period in 2006 owing to the following factors:
§
|
|
a
70 million increase in revenues from the electricity network, primarily attributable
to an
18 million rise in revenues resulting from the transport charge component and to the
recognition in the 3rd Quarter of the
51 million remuneration granted for electricity
metering services (metering equalization);
|
|
§
|
|
a
10 million increase in gas distribution network revenues due largely to the capital
gains made in the quarter from the sale of a number of local gas distribution networks.
|
The
gross operating margin
for the 3rd Quarter of 2007 totaled
976 million, an increase of
188 million (up 23.9%) attributable to:
§
|
|
a
176 million improvement in the performance of the electricity network, primarily
attributable to the
81 million increase in the electricity margin (
51 million of which
from metering equalization) and the reduction in operating costs;
|
|
§
|
|
a
12 million increase in the margin of the gas distribution network due primarily to
the aforementioned increase in revenues and a reduction in operating costs.
|
Total
operating income
, after depreciation, amortization and impairment losses amounting to
214
million (
200 million for the 3rd Quarter of 2006), came to
762 million, up
174 million
or 29.6% on the year-earlier period.
Operating performance in the first nine months of 2007
Total
revenues
for the first nine months of 2007 came to
4,137 million, up
57 million or
1.4% on the same period in 2006 owing mainly to the following factors:
§
|
|
a
42 million rise in revenues from the electricity network, due primarily to the
52
million increase in revenues from electricity transport and the
51 million remuneration
for electricity metering services (metering equalization) recognized in the 3rd Quarter; these
factors were partially offset by the gain recognized in 2006 for the sale of the distribution
network of a number of municipalities in the Province of Modena (
85 million);
|
|
§
|
|
a
15 million increase in revenues from the gas distribution network due primarily to
the recognition in the first half of 2007 of prior-year items relating to transportation for
2004-2006, (
34 million), which was partially offset by a reduction in volumes transported.
|
38
The
gross operating margin
for the first nine months of 2007 totaled
2,758 million, an increase
of
234 million or 9.3% due to:
§
|
|
a
207 million improvement in the performance of the electricity network, primarily
attributable to a
141 million reduction in operating costs and a
115 million
improvement in the electricity margin (
51 million of which for metering equalization),
partially offset by the gain recognized in 2006 for the sale of the distribution network of a
number of municipalities in the Province of Modena (
85 million);
|
|
§
|
|
a
27 million increase in the margin of the gas distribution network due primarily to
the prior-year items relating to transportation in 2004, 2005 and 2006 (mentioned in the
section on revenues).
|
Total
operating income
, after depreciation, amortization and impairment losses amounting to
634
million (
602 million for the first nine months of 2006), came to
2,124 million, an increase
of
202 million or 10.5% over the same period in 2006.
Capital expenditure
Capital expenditure
totaled
1,001 million, up
22 million on the first nine months of 2006,
largely as a result of greater investment in the electricity distribution network.
39
International
All resources used in international activities are concentrated within the International Division.
The chief geographic areas of operation for the Division are:
§
|
|
the Iberian Peninsula, where the Division is engaged in power generation (Enel Viesgo
Generación and Enel Unión Fenosa Renovables), power distribution, sales, and support services
(Electra de Viesgo Distribución, Enel Viesgo Energía and Enel Viesgo Servicios) in Spain;
|
|
§
|
|
Central Europe, where it is engaged in power trading (Enel France), wind-power development
(Enel Erelis) in France, and power generation in Slovakia (Slovenské elektrárne);
|
|
§
|
|
South-eastern Europe, where it is active in generation and support services in Bulgaria (Enel
Maritza East 3 and Enel Operations Bulgaria), power distribution, sales, and support services
in Romania (Enel Distributie Banat, formerly Enel Electrica Banat; Enel Distributie Dobrogea,
formerly Enel Electrica Dobrogea, Enel Energie, Enel Servicii Comune and Enel Romania,
formerly Enel Servicii), and wind-power development in Greece (Enelco);
|
|
§
|
|
Russia, with upstream activities in the gas industry (Enineftegaz), energy trading and sales
(RusEnergoSbyt), and generation plant operation (ESN Energo) in the Russian Federation;
|
|
§
|
|
the Americas, where it is engaged in generating power from renewable resources (Enel North
America, Enel Latin America, Enel Panama and Enel Fortuna).
|
Regulatory and rate issues
Spain
Ministerial Order 2794/2007
In Ministerial Order 2794/2007 of September 27, 2007, the Ministry of Industry updated rates as
from October 1. More specifically:
§
|
|
sales and access rates (transmission and distribution) charged to end users were left
unchanged from the previous quarter;
|
|
§
|
|
the rates and premiums of a number of plants operating under special regulations
(cogeneration and process or residue fuels) were to be updated in line with inflation and fuel
prices;
|
|
§
|
|
the new capacity remuneration mechanism (which is likely to become operational in 2008) was
set out in detail, distinguishing between the medium-term capacity payments (maximum 1 year)
and long-term capacity payments (10 years) for the remuneration of new investments and payable
to plants in line with the system coverage ratio.
|
40
Resolutions of the Ministry of Industry of April 19 and May 29, 2007
In order to limit the market power of the leading operators and to curb the volatility of market
prices, a number of measures contained in the ministerial resolutions of April 19 and May 29, 2007
and modifying the market mechanisms were issued. In particular, pursuant to the April 19
resolution, the second virtual capacity auction, in which Enel Viesgo Generación bid, winning call
options for 50 MW for the 4th Quarter of 2007 and 20 MW for the 1st Quarter of 2008, was held in
September. These options add to those acquired in the first auction, held in June, in which Enel
Viesgo Generación acquired 30 MW for the period from July 1, 2007 to June 30, 2008.
The May 29 resolution requires all distribution companies to acquire part of the electricity needed
to meet their customers needs through auctions (CESUR auctions
compra de electricidad para el
suministro ultimo recurso
), in which they must participate for pre-established shares. To date, two
auctions have been held for a total of 13,000 MW acquired by the leading distributors.
Antitrust proceedings
On February 20, 2007, the Spanish antitrust authority (Servicio de Defensa de la Competencia, SDC),
initiated a third investigation into Enel Viesgo Generación for alleged abuse of a dominant
position in the technical restraints market for the period from March to December 2003, essentially
extending the period under investigation covered by the first proceeding initiated in 2005 and
pursuant to which Enel Viesgo Generación was fined
2.5 million, to the whole of 2003. The
company appealed the ruling (the Audiencia Nacional recently granted a suspension of payment of the
fine). The Spanish antitrust court (Tribunal de Defensa de la Competencia, TDC), dismissed the
third proceeding on July 20, 2007, while the first begun in 2005 is still pending.
Emissions trading
The Spanish government opened a draft allocation plan for 20082012 to consultation in July 2007,
including individual plant allocations. However, the list of plants appears to be incomplete, and
Enel Viesgo Generacións average annual allowances (1.9 million metric tons) thus appeared partial.
The company submitted its comments at the end of August, alleging discrimination against its
coal-fired plants. The emissions produced amounted to 3.3 million metric tons in the first nine
months of 2007. Considering the allowances allocated during the period (1.9 million metric tons),
allowance purchases over the period (0.8 million metric tons), and the surplus at the start of the
period (0.3 million metric tons), the residual deficit at September 30, 2007, came to 0.3 million
metric tons. The deficit is fully covered by forward purchases.
41
Slovakia
Emissions trading
The Slovakian government revised its 2008-2012 allocation plan in September, redistributing the
allowances among the plants in the various sectors. The draft plan, which is currently open to
consultation, assigns average annual allowances of about 4.9 million metric tons to Slovenské
elektrárne.
Energy Act
An initial draft of the framework Energy Act was presented in August. Slovenské elektrárne has
already submitted its comments on the most salient aspects, relating in particular to supply
security, states of emergency, the role of the regulator, and the definition of operator with a
dominant position.
During the consultation meetings between the Economic Affairs Ministry and the industry, which were
held in September, the Ministry indicated that it was willing to accept most of Slovenské
elektrárnes comments.
Russia
Regulatory and rate issues
Pending the launch of an
ad hoc
market mechanism for remunerating the capacity of new plants made
available by generators, in August RAO UES (the federal utility) proposed a provisional mechanism
under which the installed capacity of new plants would be remunerated under bilateral capacity
contracts between the Administrator of Trading System (ATS) and the generation companies. It also
establishes penalties for generators that do not make available all the installed capacity declared
in their investment plans.
42
Operating performance of the International Division
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
Millions of euro
|
|
First nine months
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
1,020
|
|
|
|
861
|
|
|
|
159
|
|
|
Revenues
|
|
|
3,076
|
|
|
|
2,125
|
|
|
|
951
|
|
|
91
|
|
|
|
(1
|
)
|
|
|
92
|
|
|
Net income/(charges) from
commodity risk management
|
|
|
72
|
|
|
|
(1
|
)
|
|
|
73
|
|
|
246
|
|
|
|
244
|
|
|
|
2
|
|
|
Gross operating margin
|
|
|
873
|
|
|
|
617
|
|
|
|
256
|
|
|
120
|
|
|
|
164
|
|
|
|
(44
|
)
|
|
Operating income
|
|
|
491
|
|
|
|
415
|
|
|
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
|
|
11,877
|
|
|
|
10,008
|
(1)
|
|
|
1,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating liabilities
|
|
|
4,192
|
|
|
|
4,037
|
(1)
|
|
|
155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees at period-end (no.)
|
|
|
13,359
|
|
|
|
13,861
|
(1)
|
|
|
(502
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
671
|
|
|
|
228
|
|
|
|
443
|
|
|
|
|
(1)
|
|
At December 31, 2006.
|
The table below shows performance by geographical area.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
Gross operating margin
|
|
|
Operating income
|
|
Millions of euro
|
|
First nine months
|
|
|
First nine months
|
|
|
First nine months
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
Iberian Peninsula
|
|
|
734
|
|
|
|
815
|
|
|
|
(81
|
)
|
|
|
188
|
|
|
|
202
|
|
|
|
(14
|
)
|
|
|
116
|
|
|
|
105
|
|
|
|
11
|
|
Central Europe
|
|
|
1,108
|
|
|
|
620
|
|
|
|
488
|
|
|
|
426
|
|
|
|
184
|
|
|
|
242
|
|
|
|
200
|
|
|
|
134
|
|
|
|
66
|
|
South-eastern Europe
|
|
|
595
|
|
|
|
491
|
|
|
|
104
|
|
|
|
139
|
|
|
|
143
|
|
|
|
(4
|
)
|
|
|
90
|
|
|
|
105
|
|
|
|
(15
|
)
|
Russia
|
|
|
439
|
|
|
|
79
|
|
|
|
360
|
|
|
|
12
|
|
|
|
5
|
|
|
|
7
|
|
|
|
8
|
|
|
|
5
|
|
|
|
3
|
|
Americas
|
|
|
200
|
|
|
|
120
|
|
|
|
80
|
|
|
|
106
|
|
|
|
83
|
|
|
|
25
|
|
|
|
77
|
|
|
|
66
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,076
|
|
|
|
2,125
|
|
|
|
951
|
|
|
|
873
|
|
|
|
617
|
|
|
|
256
|
|
|
|
491
|
|
|
|
415
|
|
|
|
76
|
|
Net electricity generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
|
|
|
|
Millions of kWh
|
|
First nine months
|
|
|
|
|
2007
|
|
|
2006
|
|
|
|
Change
|
|
|
|
2007
|
|
|
2006
|
|
|
|
Change
|
|
|
2,861
|
|
|
|
3,039
|
|
|
|
(178
|
)
|
|
|
-5.9
|
%
|
|
Thermal
|
|
|
7,949
|
|
|
|
6,977
|
|
|
|
972
|
|
|
|
13.9
|
%
|
|
1,971
|
|
|
|
1,682
|
|
|
|
289
|
|
|
|
17.2
|
%
|
|
Hydroelectric
|
|
|
6,568
|
|
|
|
4,294
|
|
|
|
2,274
|
|
|
|
53.0
|
%
|
|
3,149
|
|
|
|
3,783
|
|
|
|
(634
|
)
|
|
|
-16.8
|
%
|
|
Nuclear
|
|
|
10,681
|
|
|
|
6,308
|
|
|
|
4,373
|
|
|
|
69.3
|
%
|
|
241
|
|
|
|
191
|
|
|
|
50
|
|
|
|
26.2
|
%
|
|
Other resources
|
|
|
830
|
|
|
|
907
|
|
|
|
(77
|
)
|
|
|
-8.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,222
|
|
|
|
8,695
|
|
|
|
(473
|
)
|
|
|
-5.4
|
%
|
|
Total
|
|
|
26,028
|
|
|
|
18,486
|
|
|
|
7,542
|
|
|
|
40.8
|
%
|
Net generation abroad for the first nine months of 2007 totaled 26,028 million kWh, an increase of
7,542 million kWh over the same period in 2006. This increase is attributable primarily to the
consolidation as from the 2nd Quarter of 2006 of Slovenské elektrárne (6,364 million kWh) which
mainly contributes with nuclear generation (4,373 million kWh) and hydroelectric generation (1,097
million kWh);
43
increased generation in South America (1,171 million kWh) resulting primarily from
the
consolidation of Enel Panama and Enel Fortuna (876 million kWh) in, respectively, the 2nd Quarter
of 2006 and the 1st Quarter of 2007 -, and a 304 million kWh increase in generation in Bulgaria.
These increases were partially offset by the decline in net power generation in Spain (199 million
kWh) and North America (98 million kWh).
Thermal and nuclear generation decreased in the 3rd Quarter, due largely to the suspension of
generation in a number of Slovenské elektrárne plants from December 31, 2006.
Contribution to gross thermal generation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
Millions of kWh
|
|
First nine months
|
|
2007
|
|
|
|
2006
|
|
|
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
99
|
|
|
|
1.3
|
%
|
|
High-sulfur fuel oil (S>0.25%)
|
|
|
|
|
|
|
|
|
|
|
148
|
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low-sulfur fuel oil (S<0.25%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99
|
|
|
|
1.3
|
%
|
|
Total fuel oil
|
|
|
|
|
|
|
|
|
|
|
148
|
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
42
|
|
|
|
0.6
|
%
|
|
Natural gas
|
|
|
9
|
|
|
|
|
|
|
|
110
|
|
|
|
0.8
|
%
|
|
3,247
|
|
|
|
48.6
|
%
|
|
|
3,279
|
|
|
|
43.5
|
%
|
|
Coal
|
|
|
9,023
|
|
|
|
43.7
|
%
|
|
|
7,553
|
|
|
|
51.4
|
%
|
|
3,436
|
|
|
|
51.4
|
%
|
|
|
4,120
|
|
|
|
54.6
|
%
|
|
Nuclear
|
|
|
11,611
|
|
|
|
56.3
|
%
|
|
|
6,873
|
|
|
|
46.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,683
|
|
|
|
100.0
|
%
|
|
|
7,540
|
|
|
|
100.0
|
%
|
|
TOTAL
|
|
|
20,643
|
|
|
|
100.0
|
%
|
|
|
14,684
|
|
|
|
100.0
|
%
|
The fuel mix used in gross thermal generation in the first nine months was significantly influenced
by the use of nuclear fuel following the consolidation of Slovenské elektrárne as from the 2nd
Quarter of 2006.
The reduction in thermal power generation in the 3rd Quarter of 2007 is attributable to the
aforementioned shutdown of Slovenské elektrárne plants.
Electricity sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
|
|
|
Millions of kWh
|
|
First nine months
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
4,264
|
|
|
|
3,307
|
|
|
|
957
|
|
|
|
28.9
|
%
|
|
High-voltage
|
|
|
13,682
|
|
|
|
4,774
|
|
|
|
8,908
|
|
|
|
186.6
|
%
|
|
860
|
|
|
|
499
|
|
|
|
361
|
|
|
|
72.3
|
%
|
|
Medium-voltage
|
|
|
3,045
|
|
|
|
1,472
|
|
|
|
1,573
|
|
|
|
106.9
|
%
|
|
1,306
|
|
|
|
1,222
|
|
|
|
84
|
|
|
|
6.9
|
%
|
|
Low-voltage
|
|
|
4,087
|
|
|
|
3,742
|
|
|
|
345
|
|
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,430
|
|
|
|
5,028
|
|
|
|
1,402
|
|
|
|
27.9
|
%
|
|
Total
|
|
|
20,814
|
|
|
|
9,988
|
|
|
|
10,826
|
|
|
|
108.4
|
%
|
Electricity sold by the International Division in the first nine months of 2007 increased by 10,826
million kWh (1,402 million kWh in the 3rd Quarter), with growth attributable primarily to the
consolidation of RusEnergoSbyt (up 10,606 million kWh in the first nine months and 1,217 million
kWh in the 3rd Quarter).
44
Operating performance in the 3rd Quarter of 2007
Revenues
in the 3rd Quarter of 2007 increased by
159 million (up 18.5%), from
861 million to
1,020 million. The increase is mostly ascribable to a revenue growth of
88 million from the
Groups Romanian subsidiaries,
62 million from the Russian subsidiaries and
18 million from the
Spanish subsidiaries, as well as the change in the scope of consolidation for Enel France, which
added a further
15 million. The increase was partly offset by a decrease of
52 million in
revenues from Slovenské elektrárne.
The
gross operating margin
for the 3rd Quarter came to
246 million, essentially unchanged with
respect to the corresponding period of the previous year.
Operating income
for the 3rd Quarter amounted to
120 million, a decrease of
44 million with
respect to the corresponding period of the previous year, mainly attributable to greater
amortization and depreciation arising from the increased valuation of Slovenské elektrárnes
facilities when allocating the purchase price. The higher cost was partly offset by reduced
amortization and depreciation at the Spanish firms, thanks to the completion of depreciation for a
number of plants.
Operating performance in the first nine months of 2007
Revenues
in the first nine months of 2007 increased by
951 million (up 44.8%), from
2,125 million
to
3,076 million. This increase was primarily due to the change in the scope of consolidation with
the acquisitions of Slovenské elektrárne (
439 million), RusEnergoSbyt (
351 million), Enel Panama
and Enel Fortuna (
70 million), Enel France (
48 million), Enineftegaz (
9 million), decreased by
the sale of 30% of the stake in Enel Unión Fenosa Renovables (a reduction of
18 million). The
total was boosted by
116 million of additional revenues from the Romanian firms, partially offset
by a reduction of
64 million in the revenues of the Spanish firms caused by a decrease in output
and declining sales prices in the first few months of 2007.
The
gross operating margin
for the first nine months of 2007 came to
873 million, an increase of
256 million (up 41.5%) over the corresponding period of 2006, of which
280 million related to the
change in the scope of consolidation (essentially Slovenské elektrárne in the amount of
260
million, Enel Panama and Enel Fortuna in the amount of
37 million). This increase was partially
offset by the
20 million decline in margins for the Bulgarian firms, due primarily to the
recognition in the 1st Quarter of 2006 of refunds received related to disputes on project delays,
as well as by the
12 million decrease in margins for the American companies.
45
Operating income
for the first nine months of 2007 came to
491 million, an increase of
76 million
over the same period of 2006. Of the total,
98 million is attributable to the change in the scope
of consolidation for the period (of which
84 million for Slovenské elektrárne) and
10 million to
the improved operating performance of the Romanian firms. These factors were partially offset by
the aforementioned refunds recognized in 2006 by the Bulgarian companies and by the
19 million
reduction in operating income from the American companies.
Capital expenditure
Capital expenditure
amounted to
671 million, an increase of
443 million with respect to the first
nine months of 2006. The rise is mainly attributable to investments in generation plants, equal to
402 million, made by Enel Viesgo Generación and Enel Unión Fenosa Renovables (for a joint total of
190 million), Enel North America (
137 million), Slovenské elektrárne (44 million) and Enel
Maritza East 3 (
26 million).
The increase in spending on distribution networks abroad, equal to
38 million, mainly reflects
higher investment by the Romanian firms.
46
Parent Company and Other Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
Millions of euro
|
|
First nine months
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
211
|
|
|
|
284
|
|
|
|
(73
|
)
|
|
Revenues
|
|
|
660
|
|
|
|
866
|
|
|
|
(206
|
)
|
|
(1
|
)
|
|
|
1
|
|
|
|
(2
|
)
|
|
Net income/(charges) from commodity
risk management
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
4
|
|
|
(36
|
)
|
|
|
41
|
|
|
|
(77
|
)
|
|
Gross operating margin
|
|
|
(101
|
)
|
|
|
175
|
|
|
|
(276
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from equity exchange transaction
|
|
|
|
|
|
|
263
|
|
|
|
(263
|
)
|
|
(40
|
)
|
|
|
38
|
|
|
|
(78
|
)
|
|
Operating income
|
|
|
(113
|
)
|
|
|
428
|
|
|
|
(541
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
|
|
904
|
|
|
|
1,013
|
(1)
|
|
|
(109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating liabilities
|
|
|
1,458
|
|
|
|
1,275
|
(1)
|
|
|
183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees at period-end (no.)
|
|
|
721
|
|
|
|
652
|
(1)
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
5
|
|
|
|
3
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services and Other Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
274
|
|
|
|
272
|
|
|
|
2
|
|
|
Revenues
|
|
|
820
|
|
|
|
782
|
|
|
|
38
|
|
|
38
|
|
|
|
44
|
|
|
|
(6
|
)
|
|
Gross operating margin
|
|
|
135
|
|
|
|
141
|
|
|
|
(6
|
)
|
|
19
|
|
|
|
23
|
|
|
|
(4
|
)
|
|
Operating income
|
|
|
75
|
|
|
|
78
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating assets
|
|
|
2,723
|
|
|
|
1,771
|
(1)
|
|
|
952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating liabilities
|
|
|
2,296
|
|
|
|
1,128
|
(1)
|
|
|
1,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees at period-end (no.)
|
|
|
4,412
|
|
|
|
4,585
|
(1)
|
|
|
(173
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
36
|
|
|
|
37
|
|
|
|
(1
|
)
|
|
|
|
(1)
|
|
At December 31, 2006.
|
Parent Company
In its capacity as an industrial holding company, Enel SpA defines strategic targets for the Group
and coordinates activities of subsidiaries.
In addition, Enel SpA manages central treasury operations and insurance risk coverage, providing
assistance and guidelines on organization, personnel management and labor relations, accounting,
administrative, fiscal, legal, and corporate matters. Moreover, Enel retains title to electricity
import contracts.
Operating performance in the 3rd Quarter of 2007
Revenues
in the 3rd Quarter of 2007 came to
211 million, a decrease of
73 million over the same
period of 2006 (down 25.7%). The decrease is largely ascribable to the fall in revenues from
electricity sales, which was essentially caused by lower prices, given that volumes sold were
virtually the same as in the year-earlier period.
47
The
gross operating margin
for the 3rd Quarter of 2007 came to a negative
36 million, a
deterioration of
77 million from the same period of 2006. The decrease was due largely to the
reduction in the margin on electricity sales (
54 million).
Operating income
was a negative
40 million, a fall of
78 million compared with the 3rd Quarter of
2006 as a result of the reduction of the margin on electricity sales.
Operating performance in the first nine months of 2007
Revenues
in the first nine months of 2007 came to
660 million, a decrease of
206 million over the
same period of 2006 (down 23.8%). The decrease is mainly attributable to:
§
|
|
a
168 million decline in revenues from electricity sales due essentially to the lower
average sales price, despite the increase in volumes sold;
|
|
§
|
|
the reversal to the income statement in the 1st Quarter of 2006 of the
23 million of
income directly recognized in equity in 2005 in relation to the measurement at fair value of
the Terna bonus shares.
|
The
gross operating margin
for the first nine months of 2007 came to a negative
101 million, a
decrease of
276 million compared with the same period of 2006. This was due largely to the
reduction in the margin on electricity sales (
210 million) and to the income on the Terna bonus
shares recognized in the 1st Quarter of 2006.
Operating income
came to a negative
113 million, a decrease of
541 million from the first nine
months of 2006 due to the decline in the gross operating margin, as well as to the recognition in
the corresponding period of the previous year of the gain on the Wind-Weather equity exchange in
the amount of
263 million.
48
Services and Other Activities
The primary purpose of the Services and Other Activities area is to provide the companies of the
Group with competitive services relating to real estate and facility management, IT, personnel
training and administration, general administration, and factoring and insurance.
Operating performance in the 3rd Quarter of 2007
Revenues
for the Services and Other Activities area in the 3rd Quarter of 2007 amounted to
274
million, essentially unchanged with respect to the same period of 2006. The higher revenues from
Enel Servizi (
29 million) were almost entirely offset by the reduction in revenues from the
Engineering and Construction unit.
The
gross operating margin
in the 3rd Quarter of 2007 came to
38 million, a decrease of
6 million
or 13.6% over the corresponding period of 2006, largely as a result of the reduction in the
activities of the Engineering and Construction unit.
Operating income
in the 3rd Quarter of 2007 amounted to
19 million, down
4 million with respect
to the corresponding period of the previous year, with depreciation, amortization and impairment
losses decreasing by
2 million.
Operating performance in the first nine months of 2007
Revenues
for the Services and Other Activities area in the first nine months of 2007 came to
820
million, compared with
782 million in the corresponding period of the previous year. The increase
of
38 million or 4.9% can essentially be attributed to the increase in services provided by Enel
Servizi to the other Divisions of the Group (
66 million) and the
16 million increase in revenues
for Dalmazia Trieste resulting from the sale of office and residential properties. These factors
were partially offset by a decline of
40 million in business for the Engineering and Construction
unit.
The
gross operating margin
in the first nine months of 2007 amounted to
135 million, a fall of
6
million compared with the same period of 2006. The decline is mostly ascribable to the
aforementioned reduction in margins on engineering activities, which was partly offset by an
increase in real estate gains.
Operating income
for the first nine months of 2007 amounted to
75 million, down
3 million with
respect to the corresponding period of the previous year.
49
Consolidated financial statements
Condensed Consolidated Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
First nine months
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
9,903
|
|
|
|
9,556
|
|
|
|
347
|
|
|
|
3.6
|
%
|
|
Total revenues
|
|
|
28,760
|
|
|
|
28,621
|
|
|
|
139
|
|
|
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,684
|
|
|
|
7,473
|
|
|
|
211
|
|
|
|
2.8
|
%
|
|
Total costs
|
|
|
22,049
|
|
|
|
21,813
|
|
|
|
236
|
|
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
(180
|
)
|
|
|
210
|
|
|
|
|
|
|
Net income/(charges) from commodity
risk management
|
|
|
|
|
|
|
(544
|
)
|
|
|
544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,249
|
|
|
|
1,903
|
|
|
|
346
|
|
|
|
18.2
|
%
|
|
GROSS OPERATING MARGIN
|
|
|
6,711
|
|
|
|
6,264
|
|
|
|
447
|
|
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from equity exchange transaction
|
|
|
|
|
|
|
263
|
|
|
|
(263
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
632
|
|
|
|
583
|
|
|
|
49
|
|
|
|
8.4
|
%
|
|
Depreciation, amortization
and impairment losses
|
|
|
1,960
|
|
|
|
1,642
|
|
|
|
318
|
|
|
|
19.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,617
|
|
|
|
1,320
|
|
|
|
297
|
|
|
|
22.5
|
%
|
|
OPERATING INCOME
|
|
|
4,751
|
|
|
|
4,885
|
|
|
|
(134
|
)
|
|
|
-2.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
293
|
|
|
|
44
|
|
|
|
249
|
|
|
|
|
|
|
Financial income
|
|
|
1,132
|
|
|
|
205
|
|
|
|
927
|
|
|
|
|
|
|
707
|
|
|
|
247
|
|
|
|
460
|
|
|
|
|
|
|
Financial expense
|
|
|
1,459
|
|
|
|
689
|
|
|
|
770
|
|
|
|
|
|
|
(414
|
)
|
|
|
(203
|
)
|
|
|
(211
|
)
|
|
|
|
|
|
Total financial income/(expense)
|
|
|
(327
|
)
|
|
|
(484
|
)
|
|
|
157
|
|
|
|
32.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
Share of income/(expense) from equity
investments accounted for using the
equity method
|
|
|
3
|
|
|
|
(7
|
)
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,205
|
|
|
|
1,118
|
|
|
|
87
|
|
|
|
7.8
|
%
|
|
INCOME BEFORE TAXES
|
|
|
4,427
|
|
|
|
4,394
|
|
|
|
33
|
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500
|
|
|
|
425
|
|
|
|
75
|
|
|
|
17.6
|
%
|
|
Income taxes
|
|
|
1,674
|
|
|
|
1,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
705
|
|
|
|
693
|
|
|
|
12
|
|
|
|
1.7
|
%
|
|
NET INCOME FOR THE PERIOD
(shareholders of the Parent Company
and minority interests)
|
|
|
2,753
|
|
|
|
2,720
|
|
|
|
33
|
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
31
|
|
|
|
(22
|
)
|
|
|
-71.0
|
%
|
|
Attributable to minority interests
|
|
|
75
|
|
|
|
80
|
|
|
|
(5
|
)
|
|
|
-6.3
|
%
|
|
696
|
|
|
|
662
|
|
|
|
34
|
|
|
|
5.1
|
%
|
|
Attributable to shareholders
of the Parent Company
|
|
|
2,678
|
|
|
|
2,640
|
|
|
|
38
|
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to
shareholders of the Parent Company
(euro)
(1)
|
|
|
0.43
|
|
|
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Diluted earnings per share are equal to earnings per share.
|
51
Condensed Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
|
|
|
|
|
|
|
|
|
|
at Sept. 30, 2007
|
|
|
at Dec. 31, 2006
|
|
|
Change
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
- Property, plant and equipment and intangible assets
|
|
|
37,315
|
|
|
|
35,557
|
|
|
|
1,758
|
|
- Goodwill
|
|
|
2,442
|
|
|
|
2,271
|
|
|
|
171
|
|
- Equity investments accounted for using the equity method
|
|
|
11,991
|
|
|
|
56
|
|
|
|
11,935
|
|
- Other non-current assets
(1)
|
|
|
4,593
|
|
|
|
3,616
|
|
|
|
977
|
|
Total
|
|
|
56,341
|
|
|
|
41,500
|
|
|
|
14,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
- Trade receivables
|
|
|
8,363
|
|
|
|
7,958
|
|
|
|
405
|
|
- Inventories
|
|
|
1,341
|
|
|
|
1,209
|
|
|
|
132
|
|
- Cash and cash equivalents
|
|
|
1,769
|
|
|
|
547
|
|
|
|
1,222
|
|
- Other current assets
(2)
|
|
|
5,527
|
|
|
|
3,286
|
|
|
|
2,241
|
|
Total
|
|
|
17,000
|
|
|
|
13,000
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
73,341
|
|
|
|
54,500
|
|
|
|
18,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Equity attributable to the shareholders of the Parent Company
|
|
|
18,246
|
|
|
|
18,460
|
|
|
|
(214
|
)
|
- Equity attributable to minority interests
|
|
|
730
|
|
|
|
565
|
|
|
|
165
|
|
Total
|
|
|
18,976
|
|
|
|
19,025
|
|
|
|
(49
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
- Long-term loans
|
|
|
21,688
|
|
|
|
12,194
|
|
|
|
9,494
|
|
- Other provisions and deferred tax liabilities
|
|
|
9,938
|
|
|
|
9,288
|
|
|
|
650
|
|
- Other non-current liabilities
|
|
|
2,603
|
|
|
|
1,160
|
|
|
|
1,443
|
|
Total
|
|
|
34,229
|
|
|
|
22,642
|
|
|
|
11,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
- Short-term loans and current portion of long-term loans
|
|
|
6,248
|
|
|
|
1,409
|
|
|
|
4,839
|
|
- Trade payables
|
|
|
5,839
|
|
|
|
6,188
|
|
|
|
(349
|
)
|
- Other current liabilities and tax provision for the period
|
|
|
8,049
|
|
|
|
5,236
|
|
|
|
2,813
|
|
Total
|
|
|
20,136
|
|
|
|
12,833
|
|
|
|
7,303
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
|
|
|
73,341
|
|
|
|
54,500
|
|
|
|
18,841
|
|
|
|
|
(1)
|
|
Of which long-term financial receivables equal to
148 million at September 30, 2007 and
1,090 million at December 31, 2006.
|
|
(2)
|
|
Of which short-term financial receivables equal to
1,203 million at September 30, 2007 (
251
million at December 31, 2006) and securities equal to
47 million at September 30, 2007 (
25
million at December 31, 2006).
|
52
Condensed Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
First nine months
|
|
|
2007
|
|
|
2006
|
|
|
Cash flows from operating activities (a)
|
|
|
3,910
|
|
|
|
5,403
|
|
|
|
|
|
|
|
|
|
|
Investments in tangible and intangible assets
|
|
|
(2,518
|
)
|
|
|
(1,795
|
)
|
Investments in entities (or business units) less cash
and cash equivalents acquired
|
|
|
(12,702
|
)
|
|
|
(923
|
)
|
Disposals of entities (or business units) less cash
and cash equivalents sold
|
|
|
|
|
|
|
518
|
|
(Increase)/Decrease in other investing activities
|
|
|
188
|
|
|
|
49
|
|
Cash flows from investing/disinvesting activities (b)
|
|
|
(15,032
|
)
|
|
|
(2,151
|
)
|
|
|
|
|
|
|
|
|
|
Change in net financial debt
|
|
|
14,131
|
|
|
|
(408
|
)
|
Dividends paid
|
|
|
(1,798
|
)
|
|
|
(2,715
|
)
|
Increase in share capital and reserves due to the exercise of stock options
|
|
|
41
|
|
|
|
77
|
|
Cash flows from financing activities (c)
|
|
|
12,374
|
|
|
|
(3,046
|
)
|
|
|
|
|
|
|
|
|
|
Impact of exchange rate fluctuations on cash and cash equivalents (d)
|
|
|
(8
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash and cash equivalents (a+b+c+d)
|
|
|
1,244
|
|
|
|
204
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the start of the period
|
|
|
572
|
|
|
|
508
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period
|
|
|
1,816
|
(1)
|
|
|
712
|
|
|
|
|
(1)
|
|
Of which
47 million in short-term securities at September 30, 2007.
|
53
Statement of Recognized Income and Expenses for the Period
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
First nine months
|
|
|
2007
|
|
|
2006
|
|
Effective portion of change in the fair value of cash flow hedges
|
|
|
104
|
|
|
|
44
|
|
Share of equity investments accounted for using the equity method
|
|
|
|
|
|
|
3
|
|
Change in the fair value of financial investments available for sale
|
|
|
44
|
|
|
|
20
|
|
Exchange rate differences
|
|
|
(54
|
)
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
Net income for period recognized in equity
|
|
|
94
|
|
|
|
54
|
|
Net income for period recognized in income statement
|
|
|
2,753
|
|
|
|
2,720
|
|
|
|
|
|
|
|
|
|
|
Total recognized income and expenses for the period
|
|
|
2,847
|
|
|
|
2,774
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
- shareholders of the Parent Company
|
|
|
2,771
|
|
|
|
2,693
|
|
- minority interests
|
|
|
76
|
|
|
|
81
|
|
54
Operating performance and financial position
Group operating performance
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
Millions of euro
|
|
First nine months
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
9,260
|
|
|
|
8,848
|
|
|
|
412
|
|
|
Electricity sales and transport
and
Electricity Equalization Fund contributions
|
|
|
26,200
|
|
|
|
25,615
|
|
|
|
585
|
|
|
213
|
|
|
|
192
|
|
|
|
21
|
|
|
Gas sold to end users
|
|
|
1,206
|
|
|
|
1,167
|
|
|
|
39
|
|
|
|
|
|
|
3
|
|
|
|
(3
|
)
|
|
Gains on the disposal of assets
|
|
|
|
|
|
|
96
|
|
|
|
(96
|
)
|
|
430
|
|
|
|
513
|
|
|
|
(83
|
)
|
|
Other services, sales and revenues
|
|
|
1,354
|
|
|
|
1,743
|
|
|
|
(389
|
)
|
|
|
|
9,903
|
|
|
|
9,556
|
|
|
|
347
|
|
|
Total
|
|
|
28,760
|
|
|
|
28,621
|
|
|
|
139
|
|
In the
3rd Quarter
of 2007, revenues from Electricity sales and transport and Electricity
Equalization Fund contributions came to 9,260 million, an increase of 412 million from the
same period of 2006 (up 4.7%). The increase essentially reflects the rise of 608 million in the
sale and transport of electricity in Italy on the free market due primarily to an increase in
quantities sold, and an increase in revenues from international operations amounting to 175
million. The rise was partly offset by lower revenues from the sale of power on the enhanced
protection and safeguard markets in the amount of 319 million.
In the
first nine months
of 2007, revenues from Electricity sales and transport and Electricity
Equalization Fund contributions amounted to 26,200 million, up 585 million or 2.3%
compared with the corresponding period of 2006.
The increase is connected primarily with the following factors:
§
|
|
a 1,122 million increase in revenues from foreign operations, 451 million of which
related to Slovenské elektrárne, 349 million to RusEnergoSbyt, 65 million to Enel
Panama and Enel Fortuna, and 15 million to Enel France;
|
|
§
|
|
a 208 million increase in revenues from domestic electricity sales and transport, the
net result of a rise of 1,855 million in revenues on the free market and a decline of
1,647 million in revenues on the enhanced protection and safeguard markets, which was
essentially attributable to a fall in volumes and the reduction in the price component
connected with the coverage of generation costs;
|
|
§
|
|
a 304 million reduction in revenues from the sale of electricity on the Power Exchange
and to the Single Buyer due essentially to the decline in sales prices;
|
55
§
|
|
a 316 million decline in revenues from sales to wholesalers due to a decline in volumes
sold to resellers;
|
|
§
|
|
an 86 million decrease in revenues from subsidized energy sales to the Electricity
Services Operator (ESO) due essentially to the lower volumes generated by CIP 6-qualified
plants, following the end of subsidies for a number of plants.
|
Revenues from
Gas sold to end users increased by 21 million in the
3rd Quarter
of 2007 (up
10.9%), while the increase in the
first nine months
of 2007 was 39 million (up 3.3%). The
increase in revenues reflects the application of Resolution no. 79/07 of the Authority for
Electricity and Gas, which definitively set the more favorable economic terms for the provision of
gas for 2005 and the 1st Half of 2006. This was partially offset by the reduction in revenues
essentially caused by a fall in the quantities sold.
Gains on the disposal of assets in the
3rd Quarter
of 2007 were virtually unchanged, but the item
declined by 96 million in the
first nine months
, mainly as a result of the recognition in the
first nine months of 2006 of capital gains from the sale in the 2nd Quarter of 2006 of distribution
networks in 18 municipalities in the Province of Modena (85 million).
Other services, sales and revenues in the
first nine months
of 2007 amounted to 1,354 million
(430 million in the
3rd Quarter
of 2007), a decline of 389 million (down 83 million in
the 3rd Quarter
) compared with the corresponding period of 2006. The decline in the
first nine
months
of 2007 reflects a fall of 186 million in the volume of fuel sold for trading (down
27 million in the
3rd Quarter
of 2007), a decrease of 80 million in revenues from contract
work in progress due to the decline in engineering and construction work in Italy and abroad (down
21 million in the
3rd Quarter
) and the recognition in the first nine months of 2006 of 92
million in revenues in connection with the settlement with Siemens (51 million) and prior-year
items with the ISO, now Terna (41 million).
56
Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
|
|
|
|
Millions of euro
|
|
First nine months
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Change
|
|
|
|
4,709
|
|
|
|
4,396
|
|
|
|
313
|
|
|
Electricity purchases
|
|
|
13,315
|
|
|
|
12,700
|
|
|
|
615
|
|
|
933
|
|
|
|
1,066
|
|
|
|
(133
|
)
|
|
Consumption
of fuel for electricity generation
|
|
|
2,517
|
|
|
|
3,150
|
|
|
|
(633
|
)
|
|
212
|
|
|
|
234
|
|
|
|
(22
|
)
|
|
Purchase of
fuel for trading and natural gas for resale to end users
|
|
|
931
|
|
|
|
1,194
|
|
|
|
(263
|
)
|
|
221
|
|
|
|
234
|
|
|
|
(13
|
)
|
|
Materials
|
|
|
496
|
|
|
|
573
|
|
|
|
(77
|
)
|
|
646
|
|
|
|
702
|
|
|
|
(56
|
)
|
|
Personnel
|
|
|
2,130
|
|
|
|
2,073
|
|
|
|
57
|
|
|
1,066
|
|
|
|
863
|
|
|
|
203
|
|
|
Services, leases and rentals
|
|
|
3,067
|
|
|
|
2,386
|
|
|
|
681
|
|
|
5
|
|
|
|
12
|
|
|
|
(7
|
)
|
|
Charges for CO
2
emissions
|
|
|
4
|
|
|
|
34
|
|
|
|
(30
|
)
|
|
143
|
|
|
|
176
|
|
|
|
(33
|
)
|
|
Other operating expenses
|
|
|
339
|
|
|
|
341
|
|
|
|
(2
|
)
|
|
(251
|
)
|
|
|
(210
|
)
|
|
|
(41
|
)
|
|
Capitalized costs
|
|
|
(750
|
)
|
|
|
(638
|
)
|
|
|
(112
|
)
|
|
|
|
7,684
|
|
|
|
7,473
|
|
|
|
211
|
|
|
Total
|
|
|
22,049
|
|
|
|
21,813
|
|
|
|
236
|
|
Costs for Electricity purchases increased in the
3rd Quarter
of 2007 by 313 million (up 7.1%)
essentially owing to the rise in the volumes of quantities purchased for the domestic free market.
In the
first nine months
of the year, costs rose by 615 million or 4.8%, largely as a result of
the change in the scope of consolidation of foreign companies and the increase in quantities
purchased for the domestic free market. These effects were partially offset by the reduction in
average electricity purchase prices, as well as by the decline in the quantities sold on the
domestic enhanced protection and safeguard markets.
Costs for the Consumption of fuel for electricity generation amounted to 933 million in the
3rd Quarter
of 2007, a fall of 133 million with respect to the corresponding period of the
previous year (down 12.5%). In the
first nine months
of 2007, costs came to 2,517 million, a
decrease of 633 million (down 20.1%), principally caused by a contraction in thermal power
generation and an improvement in the fuel mix compared with the previous year.
Costs for the Purchase of fuel for trading and natural gas for resale to end users remained
essentially unchanged in the
3rd Quarter
of 2007, whereas in the first nine months of the year they
fell by 263 million (down 22.0%), essentially reflecting a decrease in purchases of gas both
for trading and for sale to end users.
Personnel costs for the
3rd Quarter
of 2007 totaled 646 million, down 56 million (a fall
of 8.0%), while the average number of employees decreased by 4.2%. In the
first nine months
of
2007, personnel costs rose by 57 million compared with
the
57
corresponding period of 2006 (up 2.7%). Excluding the effects of the change in the scope of
consolidation, which mainly regarded foreign companies, personnel costs in the first nine months of
2007 fell by 6 million, while the average workforce declined by 3.6%. The item reflect the
impact of 65 million in charges arising in the first nine months of 2007 from litigation with
INPS.
Costs for Services, leases and rentals totaled 1,066 million for the
3rd Quarter
of 2007, up
203 million or 23.5% over the same period of 2006, while in the
first nine months
of the year,
they amounted to 3,067 million, an increase of 681 million (up 28.5%). The changes were due
essentially to an increase in electricity and gas transport costs associated with the increase in
volumes transported for the free market.
Charges for CO
2
emissions amounted to 5 million in the
3rd Quarter
of 2007, a fall
of 7 million compared with the corresponding period of the previous year. In the
first nine
months
, the charges totaled 4 million, a reduction of 30 million compared with the first
nine months of 2006. The result for the first nine months of 2007 essentially reflects the
measurement of the allowance deficit at the end of the period, which was covered by forward
purchases (around 0.5 million metric tons).
Net income/(charges) from commodity risk management
for the
3rd Quarter
of 2007 showed a positive
balance of 30 million (compared with a net charge of 180 million in the 3rd Quarter of
2006). In the
first nine months
of 2007 the net result was zero, compared with a net charge of
544 in the first nine months of 2006. The change primarily reflects the decrease in net charges
on contracts for differences with the Single Buyer, which was essentially attributable to the
declining trend in electricity prices on the pool market in the
first nine months
of 2007 with
respect to the year-earlier period. In particular, in the 3rd Quarter of 2007, the balance was
positive in the amount of 223 million, partially offset by a net charge of 193 million from
the fair value measurement of open derivatives positions at the end of the period. The result for
the
first nine months
includes income of 195 million, which was entirely cancelled out by the
effects of the fair value measurement of open derivatives positions at the end of the period.
The
income from the equity exchange transaction
recognized in the
first nine months
of 2006 regards
the measurement of the effects of the exchange of 30.97% of Wind for 20.9% of Weather, which
generated a gain of 263 million.
58
Depreciation, amortization and impairment losses
rose by 49 million (up 8.4%) in the
3rd
Quarter
of 2007, while in the
first nine months
of the year the item rose by 318 million or
19.4%, mainly as a result of the combined effect of the different period of consolidation of
Slovenské elektrárne and the increased depreciation charges on Slovenské elektrárnes property
plant and equipment following the completion at end-2006 of the process of purchase price
allocation.
Operating income
for the
3rd Quarter
of 2007 came to 1,617 million, an increase of 297
million or 22.5% on the 3rd Quarter of 2006. In the
first nine months
of 2007, operating income
totaled 4,751 million, a decrease of 134 million with respect to the corresponding period
of the previous year (a reduction of 2.7%). The decrease includes the 263 million in income
generated by the Wind-Weather equity exchange recognized in the 2nd Quarter of 2006.
Net financial expense and the result of equity investments, including those accounted for using the
equity method
rose by 210 million on a quarterly basis, due mainly to the effect of the
increase in financial expense associated with the rise in financial debt, which essentially began
in the 2nd Quarter of 2007.
In the
first nine months
of 2007, net financial expense fell by 167 million thanks primarily to
the increased income on interest and exchange rate hedges in the period and to the distribution of
dividends approved in June 2007 by Endesa shareholders (301 million). The positive effect of
these factors was diminished by the higher financial charges relating to an increase in debt in the
first nine months of 2007 and higher charges for financial derivatives.
Income taxes
for the
3rd Quarter
of 2007 totaled 500 million compared with 425 million in
the corresponding period of the previous year, and were equal to 41.5% of taxable income (38.0% in
the same period of 2006). The tax charge for the
first nine months
of 2007 amounted to an estimated
1,674 million, equal to 37.8% of taxable income, compared with 38.1% in the same period of
2006.
Analysis of the Groups financial position
Non-current assets 56,341 million
Property, plant and equipment and intangible assets
amounted to 37,315 million, an increase of
1,758 million in the first nine months of 2007. The rise is essentially the result of capital
expenditure in the period totaling 2,518 million, as well as the change in the scope of
consolidation in the amount of 1,024 million, related
primarily to the
59
acquisitions of Enineftegaz and Enel Fortuna, net of depreciation, amortization
and impairment losses on such assets in the amount of 1,808 million.
Goodwill
, which totaled 2,442 million, shows an increase of 171 million. The change
reflects the recognition in the first nine months of 2007 of the goodwill arising on acquisition of
Enineftegaz (129 million), Enel Fortuna (49 million) and AMP Resources (32 million),
partially offset by the completion in the first nine months of 2007 of the allocation of the cost
of the equity investment at the fair value of the assets acquired and liabilities assumed with
RusEnergoSbyt (a negative 27 million) and Enel Panama (a negative 14 million). The residual
goodwill recognized is considered definitive.
Equity investments accounted for using the equity method
came to 11,991 million, up 11,935
million over the previous year due primarily to the recognition in the first nine months of 2007 of
the acquisition of 24.97% of the share capital of Endesa for 10,528 million, the recognition of
the 29.99% stake in OGK-5 for 1,338 million, as well as 66 million regarding the increase
in the investment in LaGeo, which following the transfer of assets and services was classified as
an associate.
Other non-current assets
came to 4,593 million, an increase of 977 million as a result of
the following:
§
|
|
an increase of 1,208 million in other non-current assets, mainly as a result of the
recognition of the charge associated with the liability resulting from the measurement of the
put option worth 1,140 million granted by Enel to Acciona in the agreement signed on March
26, 2007;
|
|
§
|
|
an increase of 363 million in deferred tax assets, due essentially to the recognition
of tax items for the period;
|
|
§
|
|
a decrease of 594 million in non-current financial assets as a result of the
reclassification to current financial assets of 962 million relating to the sale of 26.1%
of Weather, the effect of which was partly offset by the recognition in the first nine months
of 2007 of receivables for advances on the acquisition of companies in Greece operating in the
wind-power industry (172 million) and Electrica Muntenia Sud (40 million), as well as
the increased assets connected with derivatives (87 million).
|
Current assets 17,000 million
The 405 million increase in
trade receivables
is related primarily to the increase in
receivables for electricity sales on the domestic free market.
The increase of 132 million in
inventories
is essentially due to the increased value of fuel
inventories resulting both from the larger volume of inventories at the end of the period and from
the measurement of the inventories at higher average prices.
60
Other current assets
break down as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
|
|
|
|
|
|
|
|
|
|
|
at Sept. 30, 2007
|
|
|
at Dec. 31, 2006
|
|
|
Change
|
|
|
Current financial assets
|
|
|
1,458
|
|
|
|
402
|
|
|
|
1,056
|
|
Tax receivables
|
|
|
1,165
|
|
|
|
431
|
|
|
|
734
|
|
Receivables due from Electricity Equalization Fund
|
|
|
1,615
|
|
|
|
1,355
|
|
|
|
260
|
|
Receivables due from others
|
|
|
1,289
|
|
|
|
1,098
|
|
|
|
191
|
|
|
|
Total
|
|
|
5,527
|
|
|
|
3,286
|
|
|
|
2,241
|
|
Equity attributable to the shareholders of the Parent Company 18,246 million
The
equity attributable to the shareholders of the Parent Company
totaled 18,246 million at
September 30, 2007. The main changes in the period regard net income for the period (2,678
million), the exercise of 6,564,755 options granted under the 2002, 2003 and 2004 stock option
plans, which increased equity by 41 million, and the payment of the balance on the dividend for
2006 (1,793 million), equal to 0.29 per share. On September 5, 2007 the Board of Directors
approved the distribution of an interim dividend of 0.20 per share, for a maximum total of
1,237 million. The interim dividend will be distributed as from November 22, 2007, with an
ex-dividend date of November 19, 2007.
Share capital at September 30, 2007 consisted of 6,182,740,634 ordinary shares with a par value of
1.00 each.
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of financial
|
|
|
Reserve
|
|
|
Reserve for
|
|
|
|
|
|
|
attributable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
statements in
|
|
|
from
|
|
|
investments
|
|
|
Net
|
|
|
to the
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
currencies
|
|
|
measurement
|
|
|
accounted for
|
|
|
income
|
|
|
shareholders
|
|
|
attributable
|
|
|
Total
|
|
|
|
Share
|
|
|
premium
|
|
|
Legal
|
|
|
Other
|
|
|
Retained
|
|
|
other than
|
|
|
of financial
|
|
|
using equity
|
|
|
for the
|
|
|
of the Parent
|
|
|
to minority
|
|
|
shareholders
|
|
|
|
capital
|
|
|
reserve
|
|
|
reserve
|
|
|
reserves
|
|
|
earnings
|
|
|
euro
|
|
|
instruments
|
|
|
method
|
|
|
period
|
|
|
Company
|
|
|
interests
|
|
|
equity
|
|
|
January 1, 2006
|
|
|
6,157
|
|
|
|
511
|
|
|
|
1,453
|
|
|
|
2,245
|
|
|
|
5,923
|
|
|
|
40
|
|
|
|
2
|
|
|
|
|
|
|
|
2,726
|
|
|
|
19,057
|
|
|
|
359
|
|
|
|
19,416
|
|
Exercise of stock options
|
|
|
14
|
|
|
|
69
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77
|
|
|
|
|
|
|
|
77
|
|
Stock option charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
16
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
15
|
|
Change in scope of consolidation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
174
|
|
|
|
174
|
|
Allocation of net income from the previous year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,726
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,715
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,715
|
)
|
|
|
(2
|
)
|
|
|
(2,717
|
)
|
Interim dividend for 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,234
|
)
|
|
|
(1,234
|
)
|
|
|
|
|
|
|
(1,234
|
)
|
Net income for period recognized in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13
|
)
|
|
|
63
|
|
|
|
3
|
|
|
|
|
|
|
|
53
|
|
|
|
1
|
|
|
|
54
|
|
Net income for period recognized in income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,640
|
|
|
|
2,640
|
|
|
|
80
|
|
|
|
2,720
|
|
September 30, 2006
|
|
|
6,171
|
|
|
|
580
|
|
|
|
1,453
|
|
|
|
2,244
|
|
|
|
5,950
|
|
|
|
27
|
|
|
|
59
|
|
|
|
3
|
|
|
|
1,406
|
|
|
|
17,893
|
|
|
|
612
|
|
|
|
18,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2007
|
|
|
6,176
|
|
|
|
607
|
|
|
|
1,453
|
|
|
|
2,245
|
|
|
|
5,934
|
|
|
|
81
|
|
|
|
163
|
|
|
|
|
|
|
|
1,801
|
|
|
|
18,460
|
|
|
|
565
|
|
|
|
19,025
|
|
Exercise of stock options
|
|
|
7
|
|
|
|
35
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41
|
|
|
|
|
|
|
|
41
|
|
Stock option charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
4
|
|
Change in consolidation method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94
|
|
|
|
94
|
|
Allocation of net income from the previous year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,801
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,793
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,793
|
)
|
|
|
(5
|
)
|
|
|
(1,798
|
)
|
Interim dividend for 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,237
|
)
|
|
|
(1,237
|
)
|
|
|
|
|
|
|
(1,237
|
)
|
Net income for period recognized in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(51
|
)
|
|
|
144
|
|
|
|
|
|
|
|
|
|
|
|
93
|
|
|
|
1
|
|
|
|
94
|
|
Net income for period recognized in income statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,678
|
|
|
|
2,678
|
|
|
|
75
|
|
|
|
2,753
|
|
September 30, 2007
|
|
|
6,183
|
|
|
|
642
|
|
|
|
1,453
|
|
|
|
2,248
|
|
|
|
5,942
|
|
|
|
30
|
|
|
|
307
|
|
|
|
|
|
|
|
1,441
|
|
|
|
18,246
|
|
|
|
730
|
|
|
|
18,976
|
|
62
Non-current liabilities 34,229 million
Long-term loans
amounted to 21,688 million, consisting of bonds totaling 15,780 million, as
well as bank loans and other loans in euro and other currencies amounting to 5,908 million.
Other provisions and deferred tax liabilities
rose by 650 million to 9,938 million, mainly
as a result of increased deferred tax liabilities of 939 million relating mostly to the
recognition of tax items of the period and the change in the scope of consolidation arising from
the acquisition of Enineftegaz, partly offset by a reduction of 209 million in the provisions
for risks and charges owing to greater utilization in the period.
Other non-current liabilities
amounted to 2,603 million, an increase of 1,443 million,
mainly as a result of the fair value measurement of the put option granted to Acciona (1,140
million), to be exercised in accordance with the timing and conditions specified in the agreement
with Enel of March 26, 2007.
Current liabilities
20,136 million
Short-term loans and the current portion of long-term loans
rose by 4,839 million, from
1,409 million at the end of 2006 to 6,248 million at September 30, 2007.
Trade payables
amounted to 5,839 million, a decrease of 349 million mainly resulting from a
reduction in payables for the purchase of electricity for the enhanced protection and safeguard
markets and a change in the timing of investment activities, partly offset by an increase in
payables relating to the purchase of electricity for sale on the domestic free market.
Other current liabilities and tax provision for the period
came to 8,049 million and break down
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
|
|
|
|
|
|
|
|
|
|
|
at Sept. 30, 2007
|
|
|
at Dec. 31, 2006
|
|
|
Change
|
|
|
Payables due to customers for security deposits
and reimbursements
|
|
|
1,614
|
|
|
|
1,572
|
|
|
|
42
|
|
Payables due to the Electricity Equalization Fund
|
|
|
1,015
|
|
|
|
948
|
|
|
|
67
|
|
Current financial liabilities
|
|
|
1,105
|
|
|
|
941
|
|
|
|
164
|
|
Social security contributions payable and payables
to employees and employee associations
|
|
|
488
|
|
|
|
488
|
|
|
|
|
|
Tax payables and tax provision for the period
|
|
|
1,761
|
|
|
|
410
|
|
|
|
1,351
|
|
Interim dividend
|
|
|
1,237
|
|
|
|
|
|
|
|
1,237
|
|
Other
|
|
|
829
|
|
|
|
877
|
|
|
|
(48
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
8,049
|
|
|
|
5,236
|
|
|
|
2,813
|
|
Tax payables and tax provision for the period at September 30, 2007 include estimated current
income taxes for the period of 1,424 million.
63
Net capital employed and related funding
The following schedule shows the composition of and changes in
net capital employed
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
|
|
|
|
|
|
|
|
|
|
|
at Sept. 30, 2007
|
|
|
at Dec. 31, 2006
|
|
|
Change
|
|
|
Net non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Property, plant and equipment and intangible assets
|
|
|
37,315
|
|
|
|
35,557
|
|
|
|
1,758
|
|
- Goodwill
|
|
|
2,442
|
|
|
|
2,271
|
|
|
|
171
|
|
- Equity investments accounted for using the equity method
|
|
|
11,991
|
|
|
|
56
|
|
|
|
11,935
|
|
- Other net non-current assets/(liabilities)
|
|
|
(75
|
)
|
|
|
(187
|
)
|
|
|
112
|
|
Total
|
|
|
51,673
|
|
|
|
37,697
|
|
|
|
13,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Trade receivables
|
|
|
8,363
|
|
|
|
7,958
|
|
|
|
405
|
|
- Inventories
|
|
|
1,341
|
|
|
|
1,209
|
|
|
|
132
|
|
- Net Electricity Equalization Fund
|
|
|
600
|
|
|
|
407
|
|
|
|
193
|
|
- Other net current assets/(liabilities) and tax provision for the period
|
|
|
(4,372
|
)
|
|
|
(2,634
|
)
|
|
|
(1,738
|
)
|
- Trade payables
|
|
|
(5,839
|
)
|
|
|
(6,188
|
)
|
|
|
349
|
|
Total
|
|
|
93
|
|
|
|
752
|
|
|
|
(659
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross capital employed
|
|
|
51,766
|
|
|
|
38,449
|
|
|
|
13,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Post-employment and other employee benefits
|
|
|
(2,552
|
)
|
|
|
(2,633
|
)
|
|
|
81
|
|
- Provisions for risks and charges and net deferred taxes
|
|
|
(5,469
|
)
|
|
|
(5,101
|
)
|
|
|
(368
|
)
|
Total
|
|
|
(8,021
|
)
|
|
|
(7,734
|
)
|
|
|
(287
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net capital employed
|
|
|
43,745
|
|
|
|
30,715
|
|
|
|
13,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
18,976
|
|
|
|
19,025
|
|
|
|
(49
|
)
|
Net financial debt
|
|
|
24,769
|
|
|
|
11,690
|
|
|
|
13,079
|
|
Net capital employed
went from 30,715 million at December 31, 2006 to 43,745 million at
September 30, 2007, and is covered by shareholders equity (Group and minority interests) in the
amount of 18,976 million and net financial debt of 24,769 million. With regard to the
latter figure, the debt-to-equity ratio at September 30, 2007 was 1.31 (compared with 0.61 at
December 31, 2006).
64
Net financial debt
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euro
|
|
|
|
|
|
|
|
|
|
|
|
|
at Sept. 30, 2007
|
|
|
at Dec. 31, 2006
|
|
|
Change
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
- bank loans
|
|
|
5,807
|
|
|
|
3,677
|
|
|
|
2,130
|
|
- bonds
|
|
|
15,780
|
|
|
|
8,375
|
|
|
|
7,405
|
|
- other loans
|
|
|
101
|
|
|
|
142
|
|
|
|
(41
|
)
|
Long-term debt
|
|
|
21,688
|
|
|
|
12,194
|
|
|
|
9,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term financial receivables
|
|
|
(148
|
)
|
|
|
(1,090
|
)
|
|
|
942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net long-term debt
|
|
|
21,540
|
|
|
|
11,104
|
|
|
|
10,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
- short-term portion of long-term debt
|
|
|
258
|
|
|
|
233
|
|
|
|
25
|
|
- other short-term bank debt
|
|
|
2,417
|
|
|
|
542
|
|
|
|
1,875
|
|
Short-term bank debt
|
|
|
2,675
|
|
|
|
775
|
|
|
|
1,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds (short-term portion)
|
|
|
63
|
|
|
|
59
|
|
|
|
4
|
|
Other loans (short-term portion)
|
|
|
25
|
|
|
|
31
|
|
|
|
(6
|
)
|
Commercial paper
|
|
|
3,374
|
|
|
|
531
|
|
|
|
2,843
|
|
Other short-term financial payables
|
|
|
111
|
|
|
|
13
|
|
|
|
98
|
|
Other short-term debt
|
|
|
3,573
|
|
|
|
634
|
|
|
|
2,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term financial receivables (short-term portion)
|
|
|
(995
|
)
|
|
|
(30
|
)
|
|
|
(965
|
)
|
Factoring receivables
|
|
|
(195
|
)
|
|
|
(211
|
)
|
|
|
16
|
|
Other short-term financial receivables
|
|
|
(13
|
)
|
|
|
(10
|
)
|
|
|
(3
|
)
|
Cash and cash equivalents and short-term securities
|
|
|
(1,816
|
)
|
|
|
(572
|
)
|
|
|
(1,244
|
)
|
Cash and cash equivalents and short-term financial receivables
|
|
|
(3,019
|
)
|
|
|
(823
|
)
|
|
|
(2,196
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net short-term financial debt
|
|
|
3,229
|
|
|
|
586
|
|
|
|
2,643
|
|
|
|
NET FINANCIAL DEBT
|
|
|
24,769
|
|
|
|
11,690
|
|
|
|
13,079
|
|
Net financial debt came to 24,769 million at September 30, 2007, an increase of 13,079
million compared with December 31, 2006. The main items affecting net debt during the first nine
months of 2007 were the acquisition of the 24.97% stake in Endesa at a price of 10,320 million,
the acquisition of 29.99% of OGK-5 for 1,340 million, and the acquisition from Yukos of a set
of assets in the gas industry for 674 million through Enineftegaz, a company entirely owned by
Artic Russia (formerly Eni Russia), in which Enel has a 40% stake and Eni has a 60% stake.
Net long-term financial debt increased by 10,436 million as the result of the increase in gross
long-term debt in the amount of 9,494 million and the reduction in long-term financial
receivables of 942 million. In particular, the change in long-term debt essentially reflected
Enel SpAs public multi-tranche bond issue in June 2007 under the
65
Global Medium-Term Notes program for institutional investors in the euro market for a
total value of about 4.98 billion. In September, Enel made a multi-tranche bond issue totaling
$3.5 billion for the American market, equal to around 2.5 billion, as part of the Global
Medium-Term Notes program.
Enel Produzione arranged a 450 million loan from the EIB for investment in the Enel Renewable
Energy and Environment project, 400 million of which was disbursed in July.
The decrease in long-term financial receivables is mainly attributable to the reclassification
under short-term financial receivables of the 962 million receivable in respect of the sale in
December 2006 of 26.1% of Weather Investments, which is expected to be collected within 18 months
of the transaction date.
Net short-term financial debt, in the amount of 3,229 million at September 30, 2007, increased
by 2,643 million from December 31, 2006. Of the total increase, 1,900 million related to
short-term bank debt and 2,939 million to other short-term debt, partially offset by a net
increase of 2,196 million in cash and cash equivalents and short-term financial receivables,
mainly due to the redemption of the US bonds and the reclassification of the receivable in respect
of the Weather disposal noted earlier.
Cash flows
Cash flows from operating activities
were positive at 3,910 million in the first nine months of
2007, a decline of 1,493 million with respect to the corresponding period of the previous year.
Although the cash flows benefited from the improved gross operating margin for the two periods
under examination, they reflected the increased cash needs associated with the change in net
current assets, mainly as a result of higher tax payments.
Cash flows from investing/disinvesting activities
absorbed funds in the amount of 15,032
million in the first nine months of 2007, compared with 2,151 million in the same period of the
previous year.
In particular, investments in property, plant and equipment and intangible assets amounted to
2,518 million, an increase of 723 million due essentially to higher investments in power
plants in Italy and abroad.
Investments in entities and business units, net of cash and cash equivalents acquired, totaled
12,702 million. They mainly regarded the acquisition of 24.97% of Endesa for 10,320
million, of 29.99% of OGK-5 for 1,340 million, of Enineftegaz for 674 million and of Enel
Fortuna for 125 million, as well as advances paid for the acquisition of wind projects in
Greece in the amount of 172 million and of Electrica Muntenia Sud in the amount of 40
million. In the corresponding period of
2006, investments in entities and business units (net of cash and cash equivalents acquired)
amounted to 518
66
million and essentially included the sale of 6.28% of the share capital of Wind
to a subsidiary of Weather for 328 million.
The cash flows from financing activities in the amount of 12,374 million and from operating
activities in the amount of 3,910 million covered the requirements of investing activities in
the first nine months of 2007. The surplus is reflected in the increase in cash and cash
equivalents, which at September 30, 2007 amounted to 1,816 million, compared with 572
million at the end of 2006 (including a negative 8 million from exchange rate fluctuations).
67
Other information
Related parties
As the main operator in the field of generation, transport and distribution of electricity in
Italy, Enel provides services to a number of State-controlled companies. In the current regulatory
framework, Enel concludes transactions with Terna Rete Elettrica Nazionale (Terna), the Single
Buyer, the Electricity Services Operator, and the Market Operator (each of which is controlled
either directly or indirectly by the Ministry for the Economy and Finance).
Fees for the transport of electricity payable to Terna and certain charges paid to the Market
Operator are determined by the Authority for Electricity and Gas.
Transactions relating to purchases and sales of electricity concluded with the Market Operator on
the Power Exchange and with the Single Buyer are settled at market prices.
Companies of the Domestic Sales Division acquire electricity from the Single Buyer and settle the
contracts for differences related to the allocation of CIP 6 energy with the Electricity Services
Operator, in addition to paying Terna fees for the use of the national transmission network.
Companies that are a part of the Domestic Generation and Energy Management Division, in addition to
paying fees for the use of the national transmission network to Terna, carry out electricity
transactions with the Market Operator on the Power Exchange.
Enel also acquires fuel for generation and gas for distribution and sale from Eni, a company
controlled by the Ministry for the Economy and Finance. Finally, Enel is involved in the joint
venture Artic Russia (formerly Eni Russia) with Eni, through which a number of former Yukos assets
were acquired in the 1st Half of 2007.
All transactions with related parties are concluded on normal market terms and conditions.
68
The following table summarizes the relationships:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet
|
|
|
Income statement
|
|
Millions of euro
|
|
Receivables
|
|
|
Payables
|
|
|
Costs
|
|
|
Revenues
|
|
|
|
|
at Sept. 30, 2007
|
|
|
First nine months of 2007
|
|
|
Single Buyer
|
|
|
393
|
|
|
|
1,379
|
|
|
|
7,158
|
|
|
|
923
|
|
Market Operator
|
|
|
1,012
|
|
|
|
748
|
|
|
|
2,669
|
|
|
|
4,815
|
|
Terna
|
|
|
463
|
|
|
|
501
|
|
|
|
1,577
|
|
|
|
1,655
|
|
Electricity Services Operator
|
|
|
238
|
|
|
|
288
|
|
|
|
|
|
|
|
276
|
|
Eni
|
|
|
1
|
|
|
|
70
|
|
|
|
727
|
|
|
|
175
|
|
Italian Post Office
|
|
|
|
|
|
|
45
|
|
|
|
123
|
|
|
|
12
|
|
|
|
Total
|
|
|
2,107
|
|
|
|
3,031
|
|
|
|
12,254
|
|
|
|
7,856
|
|
In compliance with the Enel Groups rules of corporate governance, in December 2006 the Board of
Directors approved specific rules affirming and governing in greater detail the conditions for
ensuring that transactions with related parties are carried out in accordance with criteria of
procedural and substantive propriety.
With a view to assuring substantive propriety in order to ensure fairness in transactions with
related parties and to account for the special nature, value or other characteristics of a given
transaction the Board of Directors and/or the Internal Control Committee may ask independent
experts to value the assets involved in the transaction and provide financial, legal or technical
advisory services.
The following table shows transactions with associated companies outstanding at September 30, 2007
and carried out during the first nine months of the year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet
|
|
|
Income statement
|
|
Millions of euro
|
|
Receivables
|
|
|
Payables
|
|
|
Costs
|
|
|
Revenues
|
|
|
|
|
at Sept. 30, 2007
|
|
|
First nine months of 2007
|
|
|
Cesi
|
|
|
1
|
|
|
|
13
|
|
|
|
7
|
|
|
|
1
|
|
LaGeo
|
|
|
30
|
|
|
|
1
|
|
|
|
|
|
|
|
4
|
|
Other companies
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
Total
|
|
|
32
|
|
|
|
15
|
|
|
|
8
|
|
|
|
5
|
|
69
Contractual commitments and guarantees
The commitments entered into by the Enel Group and the guarantees given to third parties are shown
below:
|
|
|
|
|
Millions of euro
|
|
|
|
|
|
|
at Sept. 30, 2007
|
|
|
Sureties granted to third parties
|
|
|
1,344
|
|
|
|
|
|
|
Commitments to suppliers for:
|
|
|
|
|
- electricity purchases
|
|
|
3,558
|
|
- fuel purchases
|
|
|
31,182
|
|
- various supplies
|
|
|
3,017
|
|
- tenders
|
|
|
1,422
|
|
- other
|
|
|
5
|
|
Total
|
|
|
39,184
|
|
|
|
TOTAL
|
|
|
40,528
|
|
Guarantees granted to third parties amounted to 1,344 million and include 740 million in
commitments relating to the sale of real estate assets in connection with the regulations that, for
a period of six years and six months from July 2004, govern rental charges and the termination of
leases. The value of such guarantees is reduced annually by a specified amount.
Commitments for electricity mainly regard imports from Switzerland and Germany, and are all related
to the period from October 1, 2007 to December 31, 2011.
Commitments for the purchase of fuels are determined with reference to the parameters and exchange
rates applicable at the end of the period (given that fuel prices vary and are mainly set in
foreign currencies). The total at September 30, 2007 was 31,182 million, of which 12,332
million refers to the period October 1, 2007December 31, 2011; 11,854 million to the period
20122016; 6,791 million to the period 20172021; and the remaining 205 million beyond
2021.
Contingent liabilities and assets
No material new contingent liabilities or assets emerged during the 3rd Quarter of 2007 compared
with the situation already described in the consolidated half-year report at June 30, 2007.
70
Declaration of the manager responsible for the preparation of the companys financial reports
pursuant to the provisions of Article 154-bis, paragraph 2, of Legislative Decree 58/1998
The manager responsible for the preparation of the companys financial reports, Luigi Ferraris,
declares, pursuant to Article 154-bis, paragraph 2, of the Consolidated Law on Financial
Intermediation, that the accounting information contained in the consolidated 3rd Quarter report at
September 30, 2007 corresponds with that contained in the accounting documentation, books and
records.
71
Enel
Società per azioni
Registered office in Rome
Viale Regina Margherita, 137
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
|
Enel Società per Azioni
|
|
|
By:
|
/s/ Avv. Claudio Sartorelli
|
|
|
|
Name:
|
Avv. Claudio Sartorelli
|
|
|
|
Title:
|
Secretary of Enel Società per Azioni
|
|
Dated: November 15, 2007