LNG

Italian utility Enel Group reported a drop in first-half revenues of almost 18 percent amid falling prices and lower volumes sold, though net income increased.

Enel revenues declined to €38.73 billion in the six months from €47.09Bln, a drop of 17.8 percent from the first-half of 2023.

Enel is involved in natural gas and thermal energy markets in Italy, Spain and in South American nations such as Argentina, Chile, Colombia, Brazil and Peru.

The group’s natural gas sales amounted to 4.1 billion cubic metres in the first half of 2024, a decrease 18 percent, or 0.9 Bcm in the same period of 2023.

The net electricity generated by the Enel Group in the first half amounted to 96.74 terawatt hours (TWh), a decline of 5.3 TWh on the same period of 2023.

 Market context

“The change is mainly attributable to the market context with declining prices alongside lower energy volumes from thermal sources and a decrease in quantities of electricity sold on end-user markets,” Enel explained.

“These effects were partly offset by an increase in revenues from the sale of electricity generated by renewable sources and from the management activities of distribution networks,” stated Enel.

The utility’s ordinary gross earnings increased by 8.8 percent to €11.68Bln from €10.74Bln in the first half of 2023.

“The increase is attributable to the positive contribution of the integrated businesses, driven by the excellent performance of renewable energy, which more than offset the decrease in the margin recorded in end-user markets and thermal generation,” Enel explained.

Net income

The group’s ordinary net income surged by over 20 percent to €3.95Bln from €3.28Bln in the prior-year period.

“In the first half we achieved excellent results, driven by significant organic growth reached through the strict implementation of the pillars of our Strategic Plan,” said Enel Chief Executive Flavio Cattaneo.

“The managerial actions undertaken have already allowed us to restore sound operating cash flow generation and reduce our financial debt to around €55Bln, also taking into account the transactions currently being finalized and already announced to the market, therefore reaching one of the lowest levels of leverage in the entire sector,” Cattaneo stated. 

Naturgy Energy Group, the Spanish utility with major US and Russian liquefied natural gas supply contracts as well as gas and power businesses in six Latin American countries, returned to a net profit in the first half of 2019 from a heavy loss in the year-ago period.

Naturgy posted a first-half net profit of 592 euros ($660M) compared with a loss of 3.28 billion euros reported in the same six months of 2018.

The utility had approved a new strategic plan in 2018 through to 2022 as well as a company overhaul. This meant that assets were impaired to the amount of 4.85Bln euros due to the re-measurement of the estimated future cash flows.

Naturgy is one of the companies that have signed 20-year agreements for US cargoes from Cheniere Energy’s Sabine Pass and Corpus Christi plants and is also a main contract holder for cargoes from the Yamal LNG plant in Arctic Russia operated by natural gas company Novatek.

The US and Russian volumes were booked under Naturgy's previous name, Gas Natural Fenosa.

The utility’s international LNG earnings in the first half dropped by 32.2 percent to 158M euros from 233M euros in the 2018 first-half.

European power generation earnings fell by 27.7 percent to 120M euros from 166M euros a year ago.

“In Gas & Power, the first half results have been driven by a notable improvement in services sales, which has experienced a strong margin recovery in power supply, more than offsetting a more challenging scenario in International LNG and Europe Power generation,” said Naturgy.

“The company’s new commercial policies and de-risking efforts, together with efficiencies, have also helped offset the global decline in gas prices during the period,” it added.

“The company has continued to work on improving the risk profile of its merchant activities. As such, in International LNG, for example, Naturgy has already secured approximately 90 percent of its LNG volumes for the year while in Power supply, it has continued to reduce its portfolio of fixed price sales contracts,” the company explained.

Overall gross earnings in the Gas & Power division rose 7.6 percent to 640M euros from 595M euros in the same six months of last year.

Natural gas sales in Spain declined by 8.3 percent in the first half to 116,131 gigawatt hours compared with 126,587 GWh in the first half of 2018.

“This was mainly as a result of lower sales in the Spanish residential and industrial segments (down 11.8 percent and down 14.4 percent respectively), partially compensated by higher sales to combined-cycle gas-fired power plants (up 14.0 percent) and third parties (+17.7 percent),” said Naturgy.

In its other divisions European, Middle East and Africa Infrastructure earned 919M euros, up 3.1 percent.

The Latin America South Infrastructure earnings rose 23.8 percent to 448M euros, while Latin America North Infrastructure, comprising Mexico gas and Panama electricity, came in at 189M euros, up 53.7 percent.

Latin America South includes, Chile electricity, Chile gas, Brazil gas, Argentina gas and electricity and Peru gas.

Therefore, Naturgy posted a 7.5 percent rise in first-half gross earnings of 2.15Bln euros versus 2.00Bln in the same period of 2018.

Naturgy’s net sales dropped 4.4 percent to 11.63Bln euros from 12.17Bln in the first half of last year.

The company’s diverse LNG supply portfolio also includes shipments from Algeria, Qatar and Nigeria. The company additionally owns a small fleet of LNG vessels.