ENDESA Raised Net Income 27% in the First Quarter of 2005 to Euro 560 Million.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- ENDESA (NYSE NYSE See: New York Stock Exchange :ELE ELE equine leukoencephalomalacia. ) --Strong net income growth in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). (+93.2%) and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. (+35.9%).--Total contribution from these two business accounts for 33.2% of the total net income of the Company. --Double-digit growth in electricity output (+13.2%) and sales of electricity (+19.4%). --ENDESA sustained its position as Spain's leading electricity company with market shares in output and sales to final customers of 37% and 39.2%, respectively. --It's balanced generation mix allowed to offset the impact of lower hydro hy·dro adj. Hydroelectric. n. pl. hy·dros 1. Hydroelectric power. 2. A hydroelectric power plant. output and high Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. power prices with unit fuel costs around 20% below the estimated for the rest of sector. --The company has begun the orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. disposal of its Auna stake. KEY FIGURES AND HIGHLIGHTS IN THE FIRST QUARTER OF 2005 NET INCOME GROWTH IN ALL ELECTRICITY BUSINESSES --Spain and Portugal Portugal (pôr`chəgəl), officially Portuguese Republic, republic (2005 est. pop. 10,566,000), 35,553 sq mi (92,082 sq km), SW Europe, on the western side of the Iberian Peninsula and including the Madeira Islands and the Azores in the : Euro 380 million, an increase of 21%. --ENDESA Europe: Euro 114 million, an increase of 93.2%. --ENDESA Latin America: Euro 72 million, an increase of 35.9%. --Net income reflects the recovery of the amounts paid out to finance the tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic deficit in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. generated during the quarter. Stripping out this effect, total net income would have been Euro 379 million, 14.1% lower than in the first quarter of 2004. SIGNIFICANT RISE IN MAIN INCOME STATEMENT LINES --Gross margin: Euro 2,155 million, an increase of 10.8%. --EBITDA: Euro 1,486 million, a 6.8% increase. --EBIT: Euro 1,051 million, a 4.1% rise. --Cash flow: Euro 1,012 million, up 12.2% compared to the first quarter 2004. FINANCIAL POSITION CONTINUES TO IMPROVE --At 31 March 2005, ENDESA had net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of Euro 13,257 million, up by Euro 759 million since the start of the year. --At the end of the first quarter, gearing was 143.7%, compared to 149.6% at the start of the year. ELECTRICITY BUSINESS IN SPAIN AND PORTUGAL INCREASE IN NET INCOME DESPITE A CONTEXT OF LOW RAINFALL AND HIGH FUEL COSTS --The Spanish and Portuguese business raised net profit by 21%, contributing 67.9% of ENDESA's total net income. --Low rainfall and high fuel costs, plus the modest increase in the electricity tariff, meant the industry as a whole recorded a Euro 629 million loss on regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. business, of which ENDESA's share was Euro 278 million. SPAIN'S MOST EFFICIENT POWER COMPANY --ENDESA has faced this environment favoured by its generating mix, more balanced than other sector companies, with lower variable costs lower than its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. and thanks to the evolution of the prices charged to deregulated customers. --ENDESA's unit fuel costs between January January: see month. and March was around 20% below the estimated for the rest of the sector. LARGEST GENERATOR generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. AND TOP SELLING POWER COMPANY IN THE IBERIAN Iberian Any member of a prehistoric people of southern and eastern Spain. They were largely untouched by the migrations of Celtic peoples to northern and central Spain beginning in the 8th century BC. Culturally they were influenced by Greek and Phoenician trading colonies. MARKET --ENDESA generated 24,506 GWh in the Iberian market in the first quarter, giving it a market share of 37%, 13 points above the next largest generator. It sold 25,290 GWh, a market share of 39.2%. --The Company met 96.9% of its Spanish demand from its own output giving it a clear competitive advantage over its rivals, especially in the current context of high prices. --ENDESA's coal-fired Adj. 1. coal-fired - fueled by burning coal; "a coal-fired ship" coal-burning fueled - heated, driven, or produced by burning fuel mainland Mainland. 1 Island (1991 pop. 14,150), 178 sq mi (461 sq km), N Scotland. The largest of the Orkney Islands, it is also called Pomona. Kirkwall, the seat of the Orkney Islands council area, is on the island. plants achieved a 92.1% availability rate in the first quarter of 2005, with an output sufficient to cover 15.1% of mainland demand during the period. --ENDESA had 746,386 deregulated clients as of 31 March 2005. --Its retention rate for customers switching to the deregulated rate is 87.7%, higher than the average for other companies in this sector. --CO2 emission rights emission rights: see pollution allowance. deficit in the first quarter totalled Euro 25 million, corresponding to a deficit of 2.2 million tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. . SIGNIFICANT IMPROVEMENT IN QUALITY OF SUPPLY --Average interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. time showed a 4.2% improvement for markets supplied by ENDESA in the first quarter of 2005 and a 17% improvement in the last 12 months. --In some areas improvements have been even more impressive, such as Catalonia Catalonia (kătəlō`nēə), Catalan Catalunya, Span. Cataluña, autonomous region (1990 pop. 6,165,638), NE Spain, stretching from the Pyrenees at the French border southward along the Mediterranean Sea. , where supply interruptions were down by 28% versus the same quarter 2004 and 33% for the last 12 months. SPAIN'S BIGGEST INVESTING POWER COMPANY --ENDESA invested Euro 303 million in Spain in the quarter, of which Euro 265 million, 87.5%, was capex. --Euro 190 million of this capex, 71.7%, was invested in improving distribution facilities. SIGNIFICANT PRESENCE IN THE GAS MARKET --ENDESA sold 6,354 GWh in the deregulated and regulated markets A regulated market is the provision of goods or services that is regulated by a government appointed body. The regulation may cover the terms and conditions of supplying the goods and services and in particular the price allowed to be charged. in Spain. --This figure, together with the 5,431 GWh consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. by ENDESA's generation plants, amount to a total of 11,785 GWh, implying a total 11.3% share of the Spanish natural gas market. ELECTRICITY BUSINESS IN EUROPE SHARP INCREASE IN EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). --The electricity business in Europe contributed 20.3% of ENDESA's net income in the first quarter of 2005. --EBITDA was Euro 234 million, a 56% rise on the previous year, contributing to 15.7% to the Group's EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become . --EBIT was Euro 173 million, up by 44.2% on the first quarter of 2004. ENDESA ITALIA CONTINUES TO PERFORM WELL --ENDESA sold ASM (1) (Association for Systems Management) An international membership organization based in Cleveland, Ohio. Founded in 1947 and disbanded in 1996, it sponsored conferences in all phases of administrative systems and management. Brescia Brescia (brā`shä), city (1991 pop. 194,502), capital of Brescia prov., Lombardy, N Italy. It is a commercial and highly diversified industrial center and a railroad junction. 5.33% of ENDESA ITALIA for Euro 159 million, at a net capital gain of 24 million. --The operation, which left ENDESA with an 80% stake in the company, implicitly im·plic·it adj. 1. Implied or understood though not directly expressed: an implicit agreement not to raise the touchy subject. 2. valued ENDESA Italia at Euro 2,989 million, a 36.4% increase on the acquisition price paid by ENDESA. --ENDESA Italia continued its repowering program which culminated in March with the conversion of its Ostiglia plant's group 3 to a 400 MW combined cycle A combined cycle is characteristic of a power producing engine or plant that employs more than one thermodynamic cycle. Heat engines are only able to use a portion of the energy their fuel generates (usually less than 50%). The remaining heat from combustion is generally wasted. generator. --The construction of two more 400 MW combined cycle generators continues at Scandale Scandale is a comune and town in the province of Crotone, in Calabria, southern Italy. As of 2007 Scandale had an estimated population of 3,128. [1] Sources 1. ^ "The World Gazetteer". Retrieved on 2007-02-25. (Calabria Calabria (kälä`brēä), region (1991 pop. 2,070,203), 5,822 sq mi (15,079 sq km), S Italy, a peninsula projecting between the Tyrrhenian Sea and the Ionian Sea, separated from Sicily by the narrow Strait of Messina. ) in a 50/50 joint venture between ENDESA and ASM Brescia. --Proceedings are under way for the construction of two of IDAS's three wind farms, 100% owned by ENDESA Italia. These farms will have a total installed capacity of 56 MW. --In February February: see month. 2005, ENDESA Italia paid a dividend of Euro 102 million. PROGRESS ON IMPLEMENTING THE SNET n. 1. The fat of a deer. v. t. 1. The clear of mucus; to blow. INDUSTRIAL PLAN --ENDESA has presented to the market its Industrial Plan for the 65% owned French generator SNET. The Plan envisages, among other points, the possible development of 2,000 MW of combined cycle capacity and up to 50 MW of renewable capacity. --In the first quarter of 2005 further steps were taken towards implementation of this plan with the renegotiation of the power supply contract with Electricite de France and the signing of a coal supply contract. --Additionally, agreements were reached with trade unions to ensure stable labour conditions and meet targets for workforce restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). . ELECTRICITY BUSINESS IN LATIN AMERICA CAPITALISING ON ECONOMIC RECOVERY --ENDESA's Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of business contributed 12.9% of company total net income in the first quarter of the year. --ENDESA companies were able to profit from organic growth in these markets, raising output and sales by 7.9% and 4.2% respectively. STRONG GROWTH IN EBIT AND EBITDA --EBIT from the Latin American business was Euro 324 million in January-March 2005, an increase of 14.5%. --EBITDA stood at Euro 432 million, up by 13.1%, contributing to 29.1% of the Group's EBITDA. TELECOMMUNICATIONS Communicating information, including data, text, pictures, voice and video over long distance. See communications. START OF ORDERLY SALE OF AUNA STAKE --Following the gains in Auna's value according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the analysts' consensus, ENDESA and the other main shareholders have decided to start an orderly divestment divestment to strip one's investment from an entity. process. CONSOLIDATED con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: RESULTS Strong growth in net income: +27% ENDESA's net income has reached Euro 560 million in the first quarter of 2005, a rise of 27% on the same period in 2004. Earnings per share grew by the same proportion to Euro 0.53.
NET INCOME
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Euro % Chg % of total NI % of total NI
million vs 1Q 04 1Q 2004 1Q 2005
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Spain and Portugal 380 21.0% 71.2% 67.9%
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Rest of Europe 114 93.2% 13.4% 20.3%
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Latin America 72 35.9% 12.0% 12.9%
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Other businesses (6) N/A 3.4% (1.1)%
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TOTAL 560 27% 100.0% 100.0%
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All the company's electricity businesses recorded substantial increases in net income, with particularly strong performances from Europe (+93.2%) and Latin America (+35.9%). The distribution of income by business is increasingly well-balanced well-bal·anced adj. 1. Evenly proportioned, balanced, or regulated. 2. Mentally stable; sensible or sound. well-balanced Adjective sensible and emotionally stable Adj. , confirming the economic sense of the geographical ge·o·graph·ic also ge·o·graph·i·cal adj. 1. Of or relating to geography. 2. Concerning the topography of a specific region. ge diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. developed by ENDESA over the last few years. First quarter 2005 results takes into account the recovery of the amounts contributed to finance the deficit in Spain. Should the tariff deficit recovery not have been considered, net profit would have amounted to Euro 379 million, 14.1% lower than the same period of 2004 and net profit for the electricity business in Spain and Portugal would have been Euro 199 million. Improved EBIT Much of the strong rise in net income is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the rise in electricity generation (+13.2%) and sales (+19.4%) in all businesses but most notably in Europe, outside Spain and Portugal.
ELECTRICITY GENERATION AND SALES
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Generation Sales
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GWh % Chg GWh % Chg
vs 1Q 04 vs 1Q 04
---------------------------------------------------------------------
Spain and Portugal 24,506 2.8% 25,290 2.7%
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Rest of Europe 9,299 72.7% 12,971 124.5%
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Latin America 14,558 7.9% 13,492 4.2%
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TOTAL 48,363 13.2% 51,753 19.4%
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The evolution of the generation in Spain and Portugal (+2.8%) has underlined once again the advantages of a balanced mix of generating technologies. This meant that ENDESA was less hard hit than rival power companies by the drop in rainfall levels in the first quarter of 2005. As a result, the company's output for the mainland grew by 2% in ordinary generation in the period and by 4.2% in the renewable/CHP segment. Regarding the electricity generation in the rest of Europe, the steep increase in output (+72.7%) was mainly due to a 12.9% rise in output at ENDESA Italia reflecting the development of its repowering program, as well as the contribution of French company Snet, which was not fully consolidated in the first quarter of 2004. In Latin America, generation increase (+7.9%) has reflected the higher plant utilisation rate to meet rising demand, aided by contributions from the Ralco hydro plant in Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. and the newly converted open cycle gas generator an apparatus in which gas is evolved a retort in which volatile hydrocarbons are evolved by heat a machine in which air is saturated with the vapor of liquid hydrocarbon; a carburetor a machine for the production of carbonic acid gas, for aërating water, bread, etc. at Etevensa in Peru, both of which came onstream OnStream Holdings of the Netherlands was spun off from Philips in 1998 and went bankrupt for a second time in 2003. [1] As a result of its first bankruptcy in 2001, the company was split into two parts, OnStream Data and OnStream MST. in 2004. ENDESA can now generate 93.5% of all its electricity sales. This balanced situation should considerably reduce risks in its electricity business. The balance is particularly healthy in the Spanish market where ENDESA generated 96.9% of the electricity it sold in the first quarter 2005. Active management of the generation/sales balance reduces the company's exposure to fluctuations in wholesale prices, particularly important at times like the present, when prices are high. Total electricity sales amounted Euro 4,187 million, an increase of 27.9%. Such increase has been higher in economic terms than in volume as prices rose to offset higher costs in Spain and Portugal and the Latin American businesses. The growth in revenues from electricity generation and sales covered fuel costs which remained at unusually high levels, on average 58.8% above the first quarter 2004. Note that international coal prices have fallen in the last few months but this has had no impact on costs for the first quarter 2005. As revenues more than kept pace with rising costs the company reported rises in gross margin (+10.8%). EBITDA (+6.8%) and EBIT (+4.1%).
Gross margin EBITDA EBIT
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Euro % Chg vs Euro % Chg vs Euro % Chg vs
million 1Q 04 million 1Q 04 million 1Q 04
----------------------------------------------------------------------
Spain and Portugal 1,247 2.9% 824 -2.4% 558 -6.7%
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Rest of Europe 317 71,4% 234 56,0% 173 44.2%
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Latin America 591 13,0% 432 13,1% 324 14.5%
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Other businesses - - (4) N/A (4) N/A
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TOTAL 2,155 10,8% 1,486 6.8% 1,051 4.1%
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As already pointed out, net income reflects the recovery of the amounts paid out to finance the tariff deficit in Spain generated during the quarter. Stripping out this effect, total net income would have been Euro 278 million lower. Financial results: improvement of 18.1% ENDESA reported negative financial results of Euro 221 million for the first quarter of 2005, an 18.1% improvement on the same period 2004. The net financial expense was Euro 267 million, down by 12.2% or Euro 37 million. Average cost of all ENDESA debt was 5.35% in this first quarter of 2005. Stripping out Enersis Group debt, the average cost of ENDESA's debt was 4.13% in the first quarter 2005. Enersis's average cost of debt of 9.21% results from its exchange risk hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. policy by matching revenues with debt denominated in the same currency. Thereby debt denominated in dollars has been reduced to 50% of total debt, being the remaining 50% split between 27% in Chilean pesos and 23% in other local currencies. Asset sales The company strategy of divesting non-core assets has resulted in the first quarter of 2005, in the sale of Euro 281 million generating gross capital gains of Euro 116 million. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with this policy, ENDESA and the other two key shareholders in Spanish telecoms operator Auna recently appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. to organise v. t. 1. Same as organize. Verb 1. organise - bring order and organization to; "Can you help me organize my files?" coordinate, organize structure - give a structure to; "I need to structure my days" the orderly divestment of Auna stakes and assets. Cash flow: up by 12.2% ENDESA generated operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of Euro 1,012 million in the first quarter of 2005, a rise of 12.2% compared to the same period of 2004.
CASH FLOW
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Euro million % Chg vs 1Q 2004
------------------------------------------------------------
Spain and Portugal 539 14.0
------------------------------------------------------------
Rest of Europe 200 50.4
------------------------------------------------------------
Latin America 288 23.6
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Other businesses (15) N/A
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TOTAL 1,012 12.2
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Cash flow rose significantly in all the electricity businesses, especially in the Rest of Europe and Latin America. ENDESA paid dividends of Euro 288 million to its shareholders over the period and Euro 44 million to minority shareholders in its subsidiaries. Investment: Euro 453 million, 66.9% in Spain Total investment by ENDESA in the first quarter of 2005 was Euro 453 million. Of this, Euro 397 million was in capex and the remaining Euro 56 million was financial investment. Financial structure: gearing continues to fall ENDESA's net debt was Euro 19,056 million at 31 March 2005, a Euro 358 million increase since the start of the year. Of this rise, Euro 195 million was due to the Euro's depreciation versus other currencies in which ENDESA's or its subsidiaries' debt is denominated, mainly Enersis debt.
ENDESA NET DEBT
----------------------------------------------------------------------
ENDESA and direct Enersis Group Total ENDESA
subsidiaries Group
----------------------------------------------------------------------
Euros % Euros % Euros %
Mn /total Mn s/total Mn /total
----------------------------------------------------------------------
Euro 14,396 97 4 0 14,400 76
----------------------------------------------------------------------
Dollar 415 3 2,120 50 2,535 13
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Other currencies 47 0 2,074 50 2,121 11
----------------------------------------------------------------------
Total 14,858 100 4,198 100 19,056 100
----------------------------------------------------------------------
Fixed 10,076 67 3,779 90 13,855 73
----------------------------------------------------------------------
Hedged 1,878 13 419 10 2,297 12
----------------------------------------------------------------------
Variable 2,904 20 -27 -1 2,904 15
----------------------------------------------------------------------
TOTAL 14,858 100% 4,198 100 19,056 100
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Avg. life (years) 5.3 5.8 5.4
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The breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. of debt by business is as follows:
ENDESA NET DEBT BY BUSINESS LINE
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Euro million
----------------------------------------------------------------------
31-03-05 01-01-05 Change % Chg
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Spain and Portugal electricity
business 10,017 9,586 431 4.5
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Europe electricity business 1,888 2,123 (235) -11.1
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Latin America electricity
business 5,478 5,350 128 2.4
-Enersis Group 4,198 4,081 117 2.9
-Others 1,280 1,269 11 0.9
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Other businesses 1,673 1,639 34 2.1
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TOTAL 19,056 18,698 358 1.9
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In the first quarter of 2005, the average maturity of ENDESA Group was 5.4 years. It is worth noting, the high degree of protection against interest rate risk, with 85% of all debt fixed-rate and hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. . Cash and equivalent in Spain and direct subsidiaries stood at a total of Euro 4,750 million at 31 March 2005, including Euro 2,824 million in undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely credit lines. This figure covers maturities falling due in the next 11 months for this group of companies In April ENDESA signed a syndicated loan Syndicated Loan A very large loan in which a group of banks work together to provide funds for one borrower. There is usually one lead bank that takes a small percentage of the loan and syndicates the rest to other banks. Notes: Also known as a "syndicated bank facility. comprising a Euro 500 million tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. and a Euro 1,500 million credit line tranche, with a five-year maturity and option to extend it to seven years. This strengthens the Company's cash position, covering maturities falling due in the next 20 months. Enersis group cash and equivalent was Euro 789 million at 31 March 2005, covering debt maturities for the next 16 months. Also, at 31 March 2005, ENDESA's net assets were Euro 13,257 million, a rise of Euro 759 million since the start of the year. This increase reduced gearing to 143.7% at 31 March 2005, from 149.6% at the start of the year. Gearing stays in line with the targets in the Strategic Plan for 2005-2009. Finally, at 31 March 2005 ENDESA's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. was rated A by Standard & Poor's and Fitch fitch: see polecat. and A3 by Moody's Moody's Corporation (NYSE: MCO) is the holding company for Moody's Investors Service which performs financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized ratings scale. . Accounting criteria criteria (krītēr´ē  ),n. ENDESA has prepared its consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the first quarter 2005 in accordance with the valuation and classification criteria required by International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). (IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System ) approved by the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community . Figures for the first quarter of 2004 and 31 December December: see month. 2004 have also been drawn up under IFRS to facilitate comparisons. Therefore, do not correspond to those presented in ENDESA's 2004 consolidated financial statements which were prepared under Spanish GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . Under IFRS I, which regulates first-time adoption of IFRS, companies do not need to apply IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 32 and 39 on financial instruments to figures from the 2004 financial statements presented for comparison purposes. ENDESA has taken up this option and 2004 figures therefore do not include the impact of IAS 32 and 39. Note, however, that all references to balance sheet items "at 1 January 2005" or "at the start of 2005" refer to the information at 31 December 2004 adjusted for first-time application of IAS 32 and 39. INFORMATION BY BUSINESS LINE ELECTRICITY BUSINESS IN SPAIN AND PORTUGAL High operating efficiency In the first quarter of 2005, ENDESA sustained its leadership position on the Spanish electricity market. It has a 37% market share in generation, more than 13 percentage points ahead of the second player, a 40.7% market share in distribution and a 39.2% market share in sales to final customers. Output in Spain totalled 24,506 GWh, up 2.8% on 2004, and sales in this market totalled 25,290 GWh implying a 2.7% increase. These output and sales figures sales figures npl → cifras fpl de ventas give evidence to the fact that the ENDESA's production capacity is adequately balanced with respect to the size of its market. It is worth pointing out, that following ENDESA's decision to book equity-accounted affiliates under IFRS, production figures no longer include 50% of output from Nuclenor which had previously been included. Consequently, production figures are coherent A version of Unix developed by Mark Williams Co., Northbrook, IL, that was noted for its conservative use of resources on Intel-based PCs. with accounts. On the other hand, ENDESA has remained the most efficient company in the industry with unitary unitary pertaining to a single object or individual. fuel costs around 20% below the estimated for the rest of the sector. Over the quarter, ENDESA continued to move forward its New Capacity Program for 2005-2009 to build 7,200 MW of new capacity, of which 71.7% will be CCGT CCGT Combined Cycle Gas Turbine CCGT Chicago Center for Green Technology CCGT Combined-Cycle Generating Technology CCGT catalytic combustion gas turbine and renewables renewables npl → erneuerbare Energien pl . Its also worth highlighting that work on the 400 MW Cristobal Colon colon, in anatomy colon, in anatomy: see intestine. colon, in punctuation colon, in writing: see punctuation. colon Segment that makes up most of the large intestine. CCGT plant in Huelva Huelva (wĕl`vä), city (1990 pop. 141,002), capital of Huelva prov., SW Spain, in Andalusia, on the Odiel River above its junction with the Río Tinto. advanced at a good pace in the first months of 2005. First quarter 2005 also confirmed the improving trend in ENDESA's quality of supply seen in 2004, driven by heavy investment in distribution and operating improvements over the last few years. Average interruption time showed a 4.2% improvement versus the first quarter 2004, despite unfavourable weather over the period, and a 17% improvement in the last 12 months. This reflects the results of operational improvements and the ongoing investment in distribution facilities. In some areas improvements have been even more impressive, such as Catalonia, where supply interruptions were down by 28% versus the same quarter 2004 and 33% for the last 12 months. As for customer services, the retention rate for clients in the deregulated market was 87.7%, higher than the average of its competitors, indicating considerable loyalty towards the company. On the regulation front, in the first quarter 2005, the regulator regulator, n the mechanical part of a gas delivery system that controls gas pressure that allows a manageable flow of drug vapor to escape. regulator see reducing valve. made progress towards the final decision on compensation for the extra generating costs in the islands and other non-mainland systems. Ensuring an adequate profitability for this business will be good news for ENDESA, which still the sole supplier for these systems as no other company has taken a stand to effectively compete in these markets, despite an improved regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. regime. Overall, the first quarter of 2005 brought major advances towards the key strategic targets for the business: defending its leadership of the Spanish electricity market, and establishing a perception of excellent quality. Net income up 21% Net income from the electricity business in Spain and Portugal totalled Euro 380 million in the first quarter of 2005, an increase of 21% with respect to the same period of the previous year. This figure represents 67.9% of ENDESA's total net income. It should be pointed out that during January-March 2005 ENDESA sold non-core assets of this business in Spain amounting to Euro 78 million, with a capital gain of Euro 75 million. The business in Portugal, carried under the equity method, contributed Euro 6 million to net income. This means the Spanish electricity business still accounts for the bulk of net income. EBIT: Euro 558 million. EBIT from the electricity business in Spain and Portugal amounted to Euro 558 million in the first quarter of 2005, down 6.7% on the same period in 2004. This decline was due mainly to fuel costs net cost corresponding to the emission rights deficit and fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). and depreciation and amortization. Higher fuel costs and costs deriving de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the emission rights deficit were reflected in revenues through both higher wholesale market price and, to a lesser extent, higher price applied to deregulated customers, allowing for a 26.6% increase in revenues, with a gross margin of Euro 1,247 million, 2.9% higher than in the first quarter of 2004. However, the higher revenues did not offset the increase in fixed costs and depreciation and amortization linked mainly to the investment and maintenance efforts made by the company within the framework of its Quality Excellence Plan. This effort should imply an increase in remuneration REMUNERATION. Reward; recompense; salary. Dig. 17, 1, 7. from distribution when the new regulation is approved. Low rainfall levels and high fuel costs have pushed up generation pool prices, which, given the limited growth in electricity tariffs This is a list of tariffs and trade legislation:
For ENDESA, impact of low rainfall and fuel cost increase was mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. to some extent by its more balanced generation mix compared to its rivals, which means that low rainfall has less of a negative impact, and due to the fuel management policy, which has enabled the group to contain the cost increase. Below we provide a more detailed analysis of the items comprising EBIT for ENDESA's electricity business in Spain and Portugal: Revenues: Up by 26.6% Revenues totalled Euro 2,158 million in the first quarter of 2005, 26.6% higher than in 1Q04. Of this amount, Euro 2,048 million are sales, which increased by 22.6% with respect to the first quarter of 2004.
SALES IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
Euro million
----------------------------------------------------------------------
1Q 2005 1Q 2004 Change % Chg.
----------------------------------------------------------------------
Peninsular generation in
the ordinary regime:
----------------------------------------------------------------------
Supply to deregulated
customers 367 281 86 30.6
----------------------------------------------------------------------
Supply to regulated
customers 775 474 301 63.5
----------------------------------------------------------------------
Generation in renewables/CHP
(a) 37 - 37 N/A
----------------------------------------------------------------------
Mainland distribution 397 387 10 2.6
----------------------------------------------------------------------
Non-mainland regulated
generation 288 214 74 34.6
----------------------------------------------------------------------
----------------------------------------------------------------------
Coal CTC 7 22 (15) -68.2
----------------------------------------------------------------------
Technological CTC 143 (143) N/A
----------------------------------------------------------------------
Supply to deregulated clients
outside Spain 55 42 13 31.0
----------------------------------------------------------------------
Gas distribution 11 9 2 22.2
----------------------------------------------------------------------
Gas supply 100 30 70 233.3
----------------------------------------------------------------------
Others 11 68 (57) 83.8
----------------------------------------------------------------------
TOTAL 2,048 1,670 378 22.6
----------------------------------------------------------------------
(a) In the first quarter of 2004, sales amounted to Euro 27
million, recorded under "other businesses"
Mainland generation In the first quarter of 2005, electricity demand in the Spanish mainland grew by 7.1% compared to same period of 2004. Ordinary regime generation increased by 4%, on the back of the 10.8% increase in renewables/CHF output. ENDESA's mainland electricity output totalled 21,153 GWh, implying a 2.0% increase in relation to the first quarter of 2004. Of this amount, 20,684 GWh corresponded to ordinary regime output sold in the wholesale market, a figure that is 2% higher than that of 1Q04. Changes in the structure of ENDESA's ordinary regime mainland production and that of the rest of the sector between the first quarter of 2004 and the same period of 2005 reflect the strength of the Company's generation portfolio and its greater stability in the event of sharp variations in normal rainfall rates in Spain. Between the two quarters, nuclear and hydroelectric electricity generation at ENDESA declined by 13.8%, whereas in the rest of the sector the decline was 27%. Similarly, thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. production in the sector had to increase by 41.3% between the two periods, whereas at ENDESA it rose by just 15.5%. Under these rainfall conditions, the need for the coal-fired generation to meet electricity demand in Spain is brought to the fore In advance; to the front; to a prominent position; in plain sight; in readiness for use. In existence; alive; not worn out, lost, or spent, as money, etc. - W. Collins. See also: Fore Fore . ENDESA's coal-fired plants achieved a 92.1% availability rate in the first quarter of 2005, with an output sufficient to cover 15.1% of mainland demand during the same period. Sales to the pool came to Euro 1,240 million, 75.6% higher than in the first quarter of 2004. This change was due to the 74.1% increase in the average pool revenues, including the capacity payment. The increase in average wholesale prices was due to the increase in fuel costs and the extremely dry weather conditions which have led to lower use of hydroelectric plants. In absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute , the average pool price for the period including capacity payments was Euro 54,5 per MWh, vs. Euro 31.3 per MWh in the first quarter of 2004. ENDESA's supply subsidiary acquired energy from the "pool" for an amount of Euro 465 million that was hedged with ENDESA's energy sold to the "pool" during the same timeframe, therefore matching both prices. In accordance with IFRS, amounts deriving from this "pool" are neutralized neu·tral·ize tr.v. neu·tral·ized, neu·tral·iz·ing, neu·tral·iz·es 1. To make neutral. 2. To counterbalance or counteract the effect of; render ineffective. 3. with purchases made by the supply subsidiary. Thus, "pool" sales recorded in the consolidated P&L of the first quarter of 2005 amounts to Euro 775 million. Renewable/CHF subsidiaries consolidated by ENDESA under the global method generated 469 GWh in the first quarter of 2005, mainly by tapping renewable energies Renewable energy utilizes natural resources such as sunlight, wind, tides and geothermal heat, which are naturally replenished. Renewable energy technologies range from solar power, wind power, and hydroelectricity to biomass and biofuels for transportation. (4.2% more than in the same period in 2004). Furthermore, ENDESA has holdings in other special regime companies which produced 1,037 GWh in the first quarter of the year. Revenues from special regime energy sales of consolidated subsidiaries amounted to Euro 37 million, a 37% increase on 2004, leading EBIT at ECYR ECYR Endesa Cogeneracion y Renovables (Spain) , ENDESA's subsidiary in the cogeneration cogeneration In power systems, use of steam for both power generation and heating. High-temperature, high-pressure steam from a boiler and superheater first passes through a turbine to produce power. and renewables sector, to Euro 17 million in the first quarter of 2005, fully integrated in the Spain and Portugal business. In the first quarter of 2004, ECYR obtained EBIT of Euro 11 million which was then integrated with other businesses. Consequently, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in renewable/CHF generation at ENDESA increased by 54.6% in the first quarter of 2005 with respect to the same period in 2004. Supply to deregulated customers ENDESA had 746,386 deregulated clients as of 31 March 2005. ENDESA sold these customers a total of 7,654 GWh in the first quarter, 22.9% more than in the same period last year. Revenues from supply to deregulated clients totalled Euro 367 million, up 30.6% with respect to the previous year. Of this increase, 22.9% corresponds to the increase in GWh sold and 10.7% to the increase in the average price. Mainland distribution ENDESA distributed 28,551 GWh of electricity in the Spanish market in the first quarter of 2005, a 7.5% increase on the same period of 2004. Revenues from regulated distribution amounted to Euro 397 million, an increase of 2.6% versus the same period 2004. This slight increase does not reflect the effort, in terms of both investment and operation and maintenance, required to increase security and quality of supply. Consequently, in order to attain an objective which is shared by all players in the electricity market, and in whose pursuit ENDESA plays an outstanding role (with an investment of Euro 190 million in January-March 2005) it is essential that the new regulation for distribution recognises this effort via adequate remuneration. ENDESA Distribucion Electrica supplied 16,595 GWh to customers at the regulated market. Nevertheless, in accordance with IFRS it has not been booked as revenues, as the only distribution revenue is the regulated margin. The rest of items are simply accounting for expenses incurred. Non-mainland regulated generation ENDESA's output in non-mainland systems was 3,353 GWh in the first quarter of 2005, 7.8% more than in the same period of 2004. Sales totalled Euro 288 million, implying an increase of 34.6% on 2004. Royal Decree decree, in law, decision of a suit in a court of equity. It is the counterpart in equity of the judgment in a court of law, although in those jurisdictions where law and equity have merged, judgment is sometimes used to include both. 1747/2003 governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. mainland and non-mainland electricity systems recognizes the higher cost of generation in the latter owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de the larger reserve margin required, extra cost of the specific technologies used and to higher fuel costs. The Royal Decree lays down the general principles that must be applied to determine the compensation deriving from these specific circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , although the exact methodology for quantifying these has yet to be established. In the first quarter of 2005, no additional effect was included on top of the compensation envisaged in the 2005 electricity tariff - this is pending the definitive regulatory outcome which is due to be unveiled in the next few months. Technological CTCs and regulated business deficit As already pointed out, in the first quarter of 2005, regulated revenues were not sufficient to offset system costs, and an estimated deficit of Euro 629 million ensued. Attending to Royal Decree Law5/ 2005 of March 11th, ENDESA must contribute 44,16% of the total amount of this deficit (Euro 278 million). Pursuant to the criteria of ENDESA's legal advisers and taking into account the legal nature and antecedents of this financing as well as jurisprudence jurisprudence (j r'ĭspr d`əns), study of the nature and the origin and development of law. criteria, the Company its entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to the complete recovery of the amounts rendered. Nevertheless, the government must establish specific proceedings the recovery as it did in 2002. This standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the has also been supported by the Spanish Asociation of the Energy Industry (UNESA UNESA Universidade Estácio de Sá (Rio de Janeiro, Brazil) ), as well as all of its members. For this reason, ENDESA's accounts as of 31 March 2005 include financial assets Financial assets Claims on real assets. of Euro 278 to provide for the right of recovery of the amounts contributed under this heading. In the first quarter of 2004, CTC CTC - Cornell Theory Center revenues amounted to Euro 143 million. Supply to deregulated clients outside Spain ENDESA Energia Energia also called RKK Energia formerly OKB-1 Russian aerospace company that is a major producer of spacecraft, rockets, and missiles. Energia originated in 1946 as a department within a Soviet institute conducting work on long-range missiles. sold 1,.041 GWh to deregulated customers outside Spain in the first quarter of 2005. 12.2% more than in the same period last year. Revenues from these sales totalled Euro 55 million, 31% more than in 1Q04. Gas distribution and supply: total market share of 11.3% ENDESA sold 5,901 GWh of gas in the first quarter of 2005, through companies included in the consolidation perimeter The boundary of a system or network, which defines the inside and outside. It is typically determined by firewalls and addresses. See DMZ. , implying a 69.3% increase vs. the same period one year previously. Of this amount, 4,570 GWh were sold on the deregulated market, up 99.3% on the first quarter of 2004, and 1,331 GWh on the regulated market, an 11.7%more than in the same period. In addition to this last figure 453 GWh of total sales correspond to companies that are not fully consolidated given their scant scant adj. scant·er, scant·est 1. Barely sufficient: paid scant attention to the lecture. 2. Falling short of a specific measure: a scant cup of sugar. contribution to the Group total. Consequently, total sales in the regulated market amounted to 1,784 GWh, up 15.4% with respect to the first quarter of 2004. The 6,354 GWh sold in both markets, together with the 5,431 GWh consumed by ENDESA's generation plants, amount to a total of 11,785 GWh, implying a total 11.3% share of the Spanish natural gas market. Revenues from gas sales in the deregulated market in the first quarter of 2005 totalled Euro 100 million, implying an increase of Euro 70 million vs. the same period in 2004. Revenues from regulated gas distribution amounted to Euro 11 million in the first quarter of 2005, up 22.2% on last year. Other operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. Other operating revenues in the first quarter of 2005 totalled Euro 110 million, Euro 76 million more than the same period one year earlier. This year, this heading included Euro 67 million corresponding to the booking as revenues of the part of CO2 emission rights assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to ENDESA from emissions emissions npl → émissions fpl emissions npl → Emissionen pl made in the first quarter of the year. These revenues were recorded at the market price for emission rights at the start of 2005. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. The table below shows the breakdown of operating expenses for ENDESA's Spanish and Portuguese business.
OPERATING EXPENSE IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
Euro million
----------------------------------------------------------------------
1Q 2005 1Q 2004 Change % Chg
----------------------------------------------------------------------
Purchases and services 911 492 419 85.2
----------------------------------------------------------------------
Energy purchases 216 141 75 53.2
----------------------------------------------------------------------
Fuel consumption 488 267 221 82.8
----------------------------------------------------------------------
Power transmission expenses 69 44 25 56.8
----------------------------------------------------------------------
Other purchases and services 138 40 98 245.0
----------------------------------------------------------------------
----------------------------------------------------------------------
Personnel expenses 214 193 21 10.9
----------------------------------------------------------------------
Other operating expenses 237 205 32 15.6
----------------------------------------------------------------------
Depreciation and amortization 266 246 20 8.1
----------------------------------------------------------------------
TOTAL 1,628 1,136 492 43.3
----------------------------------------------------------------------
Power purchases The 53.2% increase in power purchases, used mainly to facilitate pumping activities in hydroelectric plants and to carry out operations on the wholesale generation market, is linked to the increase in the pool price where most of these purchases are made and to gas purchases for supply. Fuel consumption Fuel consumption amounted to Euro 488 million in the first quarter, an increase of 82.8% vs. the same period in 2004. This increase is due to the fact that, as a result of the extreme drought drought, abnormally long period of insufficient rainfall. Drought cannot be defined in terms of inches of rainfall or number of days without rain, since it is determined by such variable factors as the distribution in time and area of precipitation during and before in the first quarter, fuel-oil production has increased, with higher unit costs than the other technologies, and to the 45% increase in the unit cost of imported coal, even though ENDESA paid below the odds thanks to its active fuel purchase management policy. In any case, is worth to highlight that more than half of the increase in unit fuel cost results from a transitory TRANSITORY. That which lasts but a short time, as transitory facts that which may be laid in different places, as a transitory action. deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of the generation mix, due to lower hydro conditions, and not from the evolution of fuel prices. Other supplies and services Expenses under this heading totalled Euro 138 million, up Euro 98 million vs. the same period in 2004. This increase was due to booking Euro 92 million in expenses from emission rights required to cover the mainland CO2 emissions made in the first quarter of the year, which totalled 10.8 million tonnes. Expenses for these emissions were valued as follows: --The part of these emissions covered by freely assigned emission rights was valued at the same price at which the revenues are booked, i.e., the market price at the start of 2005. --The part of these emissions covered by rights acquired in the market was recorded at the price paid for these rights. --The part of these emissions for which ENDESA does not own rights was recorded at the market price of the rights as of 31 March 2005, Euro 14.26 per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. . The net effect of revenues and expenses booked in the first quarter of 2005 to cover CO2 emissions, totalled Euro 25 million, corresponding to the estimated rights deficit for the quarter, which came to 2.2 million tonnes. At the date of publication of these earnings, no accounting rule for recording emission rights had been enacted, as IFRIC IFRIC International Financial Reporting Interpretations Committee IFRIC International Financial Reporting Issues Committee 3 (IFRS standards) has not be ratified rat·i·fy tr.v. rat·i·fied, rat·i·fy·ing, rat·i·fies To approve and give formal sanction to; confirm. See Synonyms at approve. by the EU (European Union) and the EFRAG EFRAG European Financial Reporting Advisory Group (European body that screens International Accounting Standards Committees) (European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Financial Reporting Advisory Group) has issued an endorsement A signature on a Commercial Paper or document. An endorsement on a negotiable instrument, such as a check or a promissory note, has the effect of transferring all the rights represented by the instrument to another individual. advice letter on IFRIC 3 Emission Rights in which it has decided to recommend the EU Commission not to endorse To sign a paper or document, thereby making it possible for the rights represented therein to pass to another individual. Also spelled indorse. endorse (indorse) v. IFRIC 3 in Europe. In this respect, ENDESA has recorded the emission rights based on IFRIC 3, but modifying the points opposed op·pose v. op·posed, op·pos·ing, op·pos·es v.tr. 1. To be in contention or conflict with: oppose the enemy force. 2. by the EFRAG. Therefore, the accounting is provisional Temporary; not permanent. Tentative, contingent, preliminary. A provisional civil service appointment is a temporary position that fills a vacancy until a test can be properly administered and statutory requirements can be fulfilled to make a permanent appointment. and subject to change when the new accounting rule is issued. Personnel expenses At 31 March 2005, the workforce in Spain and Portugal totalled 12,832, down 0.4% on 2004 year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . Personnel expenses amounted to Euro 214 million in 1Q05, an increase of 10.9% vs. the same period in 2004. This rise came as a result of the wage increase for 2005 and the impact on the cost of employment restructuring of higher inflation in the first quarter, implying an increase of Euro 9 million in provisions against the cost of these redundancies. The effect in 2004 was only recorded at year-end, once the definitive inflation rate was published. Other fixed operating expenses Other fixed operating expenses totalled Euro 237 million in the first quarter of 2005, an increase of Euro 32 million with respect to 2004. This increase was due mainly to the cost of operating and maintaining the distribution network and to the inclusion of the renewables/CHF business, which includes expenses under this heading totalling Euro 9 million. However, we note that in the first quarter of the year there has been a significant decline in costs with respect to the last few quarters of 2004. Net financial expenses: 27.1% improvement on a like-for-like basis ENDESA reported a financial result for the first quarter of 2005 of Euro 116 million. Of this amount, Euro 113 million correspond to net financial expenses, which include Euro 15 million corresponding to the cost of preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. considered as debt in 2005, and, therefore, its cost is booked as financial expenses. In the first quarter of 2004 they were booked as minority interests since IAS 32 was not applied last year and preferred shares were booked as minority interests and not as financial debt. On a like-for-like basis, net financial expenses declined Euro 42 million, a 27.1% decrease. Net debt in the Spain and Portugal business totalled Euro 10,017 million as of 31 March 2005, vs. Euro 9,586 million at the start of 2005. This increase came from the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. effect of the first quarter of each year, when a significant amount of capex and expenses from last quarter of the previous year is disbursed, as well as 2004 interim dividend payment on the first quarter that amounted to Euro 288 million. Equity-accounted income: Euro 10 million Equity-accounted income in ENDESA's electricity business in Spain and Portugal in the first quarter of 2005 amounted to Euro 10 million and mostly includes Euro 6 million from subsidiaries in Portugal and Euro 9 million from generation subsidiaries operating under the special regime. In the first quarter of 2004, Euro 5 million and Euro 3 million were recorded under the European business and Other businesses, respectively. Asset divestments: Euro 75 million in capital gains In the first quarter of 2005, ENDESA shed shed rural building used for agricultural pursuits. shed hands miscellaneous workers in a shearing shed at shearing time, i.e. persons other than the shearers, wool classers. assets from the electricity business in Spain and Portugal for Euro 86 million, posting capital gains of Euro 75 million. Among them we highlight the sale of land in Palma de Mallorca Palma is the major city and port on the island of Mallorca and capital city of the autonomous community of the Balearic Islands in Spain. It is situated on the south coast of the island on the Bay of Palma. where GESA's headquarters was formerly located, for Euro 73 million after sale costs, implying capital gains of Euro 65 million. Cash flow: up 14% Cash flow amounted to Euro 539 million in the first quarter of 2005, an increase of 14% vs. the same period in 2004. Capex: Euro 190 million in distribution. Capex in Spain and Portugal came to Euro 303 million in the first quarter of 2004, 34.7% higher than the same period in 2004.
TOTAL INVESTMENT IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
Euro million
----------------------------------------------------------------------
1Q 2005 1Q 2004 % Chg
----------------------------------------------------------------------
Tangibles 265 192 38.0
----------------------------------------------------------------------
Intangibles 13 3 333.3
----------------------------------------------------------------------
Financial 25 30 16.7
----------------------------------------------------------------------
Total investments 303 225 34.7
----------------------------------------------------------------------
87.5% of total capex was tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. , used in developing or improving electricity generation and distribution facilities, in order to maintain ENDESA 's leadership in the Iberian market.
INVESTMENT IN TANGIBLE ASSETS IN SPAIN AND PORTUGAL
----------------------------------------------------------------------
Euro million
----------------------------------------------------------------------
1Q 2005 1Q 2004 % Chg
----------------------------------------------------------------------
Generation 71 46 54.3
----------------------------------------------------------------------
Ordinary regime 68 46 47.8
----------------------------------------------------------------------
Renewables/CHF 3 (a)
----------------------------------------------------------------------
Distribution 190 127 49.6
----------------------------------------------------------------------
Others 4 19 N/A
----------------------------------------------------------------------
Total 265 192 38.0
----------------------------------------------------------------------
(a) In the first quarter of 2004 were included in other businesses
and amounted to Euro 34 million.
----------------------------------------------------------------------
Similarly, the breakdown of tangible capex reflects the considerable effort made by the Company over the last few years to improve the quality of its service, since investment in distribution facilities accounts for 71.7% of total tangible capex in this business. As we have said, the new regulation for distribution should adequately remunerate re·mu·ner·ate tr.v. re·mu·ner·at·ed, re·mu·ner·at·ing, re·mu·ner·ates 1. To pay (a person) a suitable equivalent in return for goods provided, services rendered, or losses incurred; recompense. 2. these investments. Electricity business in Europe Excellent economic results and sound growth opportunities In the rest of Europe, ENDESA focused on two of its main strategic targets in the first quarter of 2005: consolidating its position in this market and seeking new growth opportunities. On 1 February 2005 ENDESA sold ASM Brescia, its partner in ENDESA Italia, 5.33% of its stake in that company for a total of Euro 159 million, with a net capital gain of Euro 24 million. Following this operation, ENDESA's stake in ENDESA Italia stands at 80%. The transaction also unlocks the value of ENDESA Italia, as it suggests an implicit valuation of Euro 2,989 million for the company, 36.4% higher than the price paid by ENDESA when it originally acquired the Italian group in 2001. We also highlight that in the middle of March culminated the repowering work to Ostiglia plant's group 3 to a 400 MW combined cycle generator. Also, work is on schedule for the construction of two 400 MW combined cycle groups at the Scandale plant in Calabria. This project was acquired at the end of December 2004 by ENDESA and ASM Brescia (50/50). In addition, proceedings are underway for the construction of two of IDAS' three wind farms - 100% of which was awarded to ENDESA Italia at the end of December last year. The two farms will have an installed capacity of 56 MW and are expected to come on-stream on-stream adv. & adj. In or into operation or production. in mid 2006. ENDESA has reached an agreement with the Italian group Merloni to supply electricity to the retail market. The supply base for the power sold will be ENDESA Italia's generation capacity. The Merloni group will contribute a portfolio of more than 2,000 customers in Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. and sales volumes of over 2 TWh. Is also worth to highlight that in February 2005, ENDESA Italia paid a dividend of Euro 102 million. On 17 February, ENDESA presented an outline of its Industrial Plan for the French generation group Snet (65% ENDESA). This Plan envisages the possibility of investment in new capacity using its current sites with a total of 2,000 MW in new CCGT capacity and 200 MW in renewable capacity. Additionally, in the first quarter of 2005 the power supply contract with EDF (algorithm) EDF - earliest deadline first. was successfully re-negotiated, a coal supply contract has been signed and agreements were reached with the trade unions to ensure stable labour conditions and meet targets for workforce restructuring. Net income: up 93.2% Net income from the electricity business in Europe totalled Euro 114 million in the first quarter of 2005, an increase of 93.2% with respect to 2004. The table below shows a breakdown of output and sales figures by country:
BREAKDOWN OF ENDESA'S GENERATION AND SALES IN EUROPE
----------------------------------------------------------------------
Generation Sales
----------------------------------------------------------------------
(GWh) 1Q 2005 1Q 2004 % Chg. 1Q 2005 1Q 2004 % Chg.
----------------------------------------------------------------------
Italia 6,081 5,384 12.9 8,410 5,777 45.6
----------------------------------------------------------------------
Francia 2,533 - - 3,876 - -
----------------------------------------------------------------------
Polonia(b) 685 - - 685 - -
----------------------------------------------------------------------
Total 9,299 5,384 72.7 12,971 5,777 124.5
----------------------------------------------------------------------
(b) ENDESA is present in the generation business in Poland through
the stake held by Snet in the Bialystock co-generation plant.
----------------------------------------------------------------------
EBIT: growth of 44.2% EBITDA and EBIT for the group's European electricity business can be broken down as follows:
EBITDA & EBIT IN EUROPE
----------------------------------------------------------------------
Euro Million EBITDA EBIT
----------------------------------------------------------------------
1Q 2005 1Q 2004 % var. 1Q 2005 1Q 2004 % var.
----------------------------------------------------------------------
ENDESA Italia 189 152 24.3 156 122 27.9
----------------------------------------------------------------------
Snet 43 - N/A 15 - N/A
----------------------------------------------------------------------
Trading 7 1 600.0 7 1 600.0
----------------------------------------------------------------------
Holding & Others (5) (3) N/A (5) (3) N/A
----------------------------------------------------------------------
Total 234 150 56.0 173 120 44.2
----------------------------------------------------------------------
Positive performance of ENDESA Italia continues The following table shows changes in ENDESA Italia's EBIT between the first quarter of 2005 and the first quarter of 2004.
ENDESA ITALIA KEY DATA
----------------------------------------------------------------------
Millones de euros
----------------------------------------------------------------------
1Q 2005 1Q 2004 Diferencia % var.
----------------------------------------------------------------------
Revenues 560 389 171 44.0
----------------------------------------------------------------------
Energy purchases (95) (14) (81) 578.6
----------------------------------------------------------------------
Fuel procurement cost (211) (187) (24) 12.8
----------------------------------------------------------------------
Transmission expenses (2) (1) (1) 100.0
----------------------------------------------------------------------
Other purchases and services (24) - (24) N/A
----------------------------------------------------------------------
Gross Margin 228 187 41 21.9
----------------------------------------------------------------------
Capitalized expenses 1 1 - -
----------------------------------------------------------------------
Personnel expenses (17) (16) (1) 6.3
----------------------------------------------------------------------
Other expenses (23) (20) (3) 15.0
----------------------------------------------------------------------
EBITDA 189 152 37 24.3
----------------------------------------------------------------------
Depreciations (33) (30) (3) 10.0
----------------------------------------------------------------------
EBIT 156 122 34 27.9
----------------------------------------------------------------------
Revenues reported by the Italian group grew 44% due largely to the 45.6% rise in energy sold. The company sold 8,410 GWh of electricity in the quarter, of which 2,329 GWh were acquired from third parties at a cost of Euro 95 million. ENDESA Italia generated a total of 6,081 GWh of electricity this quarter, an increase of 12.9% vs. the same period last year. Its market share in Italy was 8.2% at March 2005, up 1.3% vs. 1Q04. The repowering program implemented by ENDESA Italia has allow the group not only to increase its production using a more efficient mix by replacing fuel-gas output with power generated by combined cycle plants, but also a grater capacity to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the impact of fuel price
increases. For this reason, costs at ENDESA Italia only rose by 12.8% -
in line with the increase in output.The positive impact of the repowering program on the company's generation structure can be clearly seen if we compare the breakdown by technology in the first quarter of 2004 with the first quarter of 2005. The weight of CCGT capacity in the production mix has increased from 25.7% to 45.9%, while the weight of fuel-gas has declined from 40.7% to 17.8%. On 1 October October: see month. 2004 the European Union approved payment of the stranded strand 1 n. The land bordering a body of water; a beach. v. strand·ed, strand·ing, strands v.tr. 1. To drive or run ashore or aground. 2. costs recognised in Italy. Of the total amount recognised, Euro 169 million correspond to ENDESA Italia. The method and schedule for the payment of these stranded costs have yet to be defined and for this reason no revenues deriving from this concept have been booked in our forecasts. Financial results: Euro 235 million debt reduction Financial results for the electricity business in Europe reflected a cost of Euro 15 million in the first quarter of 2005, the same as in the first quarter of 2004. We note that since 31 March 2004, ENDESA has acquired an additional 35% stake in Snet, without this leading to any increase in financial expenses for this business. Net debt of the European business stood at Euro 1,888 million at 31 March 2005, compared to Euro 2,123 million at the beginning of the year - a reduction of Euro 235 million, or 11.1%. Cash flow: growth of 50.4% Cash flow generated from group operations stood at Euro 200 million, a rise of 50,4% compared to 2004. Cash flow amounted to Euro 200 million, an increase of 50.4% compared to the first quarter of 2004. Capex: Euro 45 million Investment in the European electricity business stood at Euro 45 million in the first quarter. This was virtually all capex. Of the total recognised, Euro 36 million correspond to ENDESA Italia and Euro 5 million to Snet. Additionally, in the first quarter of 2005, the following divestments were made: --5.33% of ENDESA Italia was sold to ASM Brescia for Euro 121 million, generating a net capital gain of Euro 24 million. Following this divestment, ENDESA now holds 80% of ENDESA Italia and ASM Brescia holds the remaining 20%. --The 18% stake held by ENDESA in the Moroccan water group LYDEC was sold for Euro 26 million, generating a net capital gain of Euro 12 million. Electricity business in Latin America Capitalising on economic recovery: strong growth in output and sales The process of economic recovery in Latin America seen in 2004 was confirmed in the first quarter of 2005 leading to increases in electricity demand up to 8.1%. This increase in demand boosted generation at ENDESA's subsidiaries, which showed an average growth of 7.9% compared to the same period last year. Average sales grew by 4.2% vs. first quarter 2004 in all areas in which ENDESA's subsidiaries operate. Generation and distribution figures for ENDESA's Latin American subsidiaries were as follows:
GENERATION AND DISTRIBUTION OF THE LATIN AMERICAN BUSINESS
----------------------------------------------------------------------
Generation (GWh) Distribution (GWh)
----------------------------------------------------------------------
1Q 2005 % chg 1Q 2005 % chg
----------------------------------------------------------------------
Chile 4,301 8.8 2,823 3.7
----------------------------------------------------------------------
Colombia 2,855 0.7 2,386 1.2
----------------------------------------------------------------------
Argentina 4,719 14.0 3,516 2.2
----------------------------------------------------------------------
Brazil 1,129 -13.8 3,665 8.1
----------------------------------------------------------------------
Peru 1,554 23.5 1,102 5.9
----------------------------------------------------------------------
TOTAL 14,558 7.9 13,492 4.2
----------------------------------------------------------------------
Growth shown by the markets supplied by ENDESA and tighter reserve margins caused a generalized gen·er·al·ized adj. 1. Involving an entire organ, as when an epileptic seizure involves all parts of the brain. 2. Not specifically adapted to a particular environment or function; not specialized. 3. increase in prices and margins. This was reflected in the good operating performance with EBIT rising 22.9% in the generation and transmission business and 6.3% in distribution. The strong business performance was reflected by both Enersis and ENDESA Chile's share prices, the main subsidiaries in this activity, which have risen by 27.1% and 55.1%, respectively, in the last 12 months. Net income growth of 35.9% Net income from the electricity business in Latin America totalled Euro 72 million in the first quarter of 2005, an increase of 35.9% with respect to 2004. This figure accounted for 12.9% of ENDESA's total net income in the period. EBIT: growth of 14.5% The table below sets out EBITDA and EBIT for ENDESA's Latin American electricity business, broken down by activity:
EBITDA & EBIT IN LATIN AMERICA
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Millones de euros
----------------------------------------------------------------------
EBITDA EBIT
----------------------------------------------------------------------
1Q 2005 1Q 2004 % Chg 1Q 2005 1Q 2004 % Chg
----------------------------------------------------------------------
Generation and
transmission 264 220 20.0 204 166 22.9
----------------------------------------------------------------------
Distribution 184 172 7.0 135 127 6.3
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Others (16) (10) N/A (15) (10) N/A
----------------------------------------------------------------------
Total 432 382 13.1 324 283 14.5
----------------------------------------------------------------------
The following table shows a breakdown of EBITDA and EBIT by country where ENDESA operates through fully consolidated subsidiaries.
BREAKDOWN OF EBITDA AND EBIT IN LATAM BY BUSINESS LINE
----------------------------------------------------------------------
Generation and transmission
----------------------------------------------------------------------
Euro million EBITDA EBIT
----------------------------------------------------------------------
1Q 2005 1Q 2004 % Chg 1Q 2005 1Q 2004 % Chg
----------------------------------------------------------------------
Chile 71 68 4.4 45 49 -8.2
----------------------------------------------------------------------
Colombia 54 47 14.9 43 36 19.4
----------------------------------------------------------------------
Brazil - Generation 32 16 100.0 28 13 115.4
----------------------------------------------------------------------
Brazil - Transmission 21 21 0.0 17 17 0.0
----------------------------------------------------------------------
Peru 42 31 35.5 32 21 52.4
----------------------------------------------------------------------
Argentina - Generation 40 33 21.2 35 26 34.6
----------------------------------------------------------------------
Argentina - Transmission 4 4 0.0 4 4 0.0
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TOTAL 264 220 20.0 204 166 22.9
----------------------------------------------------------------------
----------------------------------------------------------------------
Distribution
----------------------------------------------------------------------
Euro million EBITDA EBIT
----------------------------------------------------------------------
1Q 2005 1Q 2004 % Chg 1Q 2005 1Q 2004 % Chg
----------------------------------------------------------------------
Chile 37 36 2.8 32 32 0.0
----------------------------------------------------------------------
Colombia 49 48 2.1 31 32 -3.1
----------------------------------------------------------------------
Brazil 58 44 31.8 45 31 45.2
----------------------------------------------------------------------
Peru 18 18 0.0 11 12 -8.3
----------------------------------------------------------------------
Argentina 22 26 -15.4 16 20 -20.0
----------------------------------------------------------------------
TOTAL 184 172 7.0 135 127 6.3
----------------------------------------------------------------------
Generation and transmission --Chile Revenues increased 18.5% on the back of the increase in energy generated (+8.8%) due to the Ralco hydroelectric plant Ralco Hydroelectric Plant is a hydroelectric power station in Bío-Bío Region, Chile. The plant uses water from the upper Bío-Bío River and produces 690MW of electricity.[1] The plant was builded by ENDESA in 2004.[1] References 1. joining the grid grid: see electron tube. (1) Any interconnected set of nodes such as the electric power network or a communications network. (2) "The Grid" is a nickname for Internet2. See Internet2. , and prices in the various systems remaining unchanged. However, these increase was partially offset by the gas supply problems affecting thermal plants which required replacing with liquid fuels. In this context, production at the Ralco plant led to EBITDA of Euro 71 million, 4.4% higher than in the first quarter of 2004. However, EBIT after depreciation fell by Euro 4 million - half of which was due to the Chilean peso/euro exchange rate. --Colombia Sales in the Colombian generation business stood at Euro 88 million, a 10% increase from the first quarter of 2004, due to the better generation mix. This increase in sales was fully passed onto EBITDA and EBIT which increased by 14.9% and 19.4% respectively. --Brazil - Generation Rainfall conditions during the quarter led to increased production at the Cachoeira Dourada Cachoeira Dourada is a small town and municipality in south-central Goiás state, Brazil. The population was 8,539 (2005 estimate) in a total area of 732 km².
rtəlĕ`zə), city (1996 pop. 1,967,365), capital of Ceará state, NE Brazil, a port on the Atlantic Ocean. (CCGT) plant.Sales were Euro 49 million - a rise of 32.4% vs. 2004. This increase, coupled with lower fuel consumption, led to a 100% increase in EBITDA (Euro 32 million) and a 115.4% rise in EBIT (Euro 28 million). --Brazil - Transmission EBITDA and EBIT for the interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. between Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. and Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. remained stable at Euro 21 million and Euro 17 million respectively, with no significant changes in results components. However, the difficulties in finding available electricity in Argentina to export to Brazil, due to gas supply restrictions, could have an impact on results at this interconnection in the next few months. --Peru Sales in the Peruvian generation business stood at Euro 64 million, a 16.4% increase from the first quarter of 2004 despite the drop in prices caused by the improved rainfall conditions. However, the 23.5% increase in power generated offset this effect. Also, improved rainfall conditions led to a Euro 7 million decrease in fuel costs. In total, EBITDA and EBIT both rose by Euro 11 million to Euro 42 million and Euro 32 million respectively. --Argentina Sales in the Argentinean generation business stood at Euro 75 million, a 34.8% increase from the first quarter of 2004, due to the increase in production and prices (especially spot market prices). The rise in sales was partly offset by the rise in fuel costs which doubled due to problems with the gas supply and the necessity to produce with liquid fuels. Nonetheless, both EBITDA and EBIT rose 21.2% and 34.6% respectively. Distribution --Chile Both EBITDA and EBIT remained stable vs. 2004 given that the increase in sales caused by the rise in demand was offset by the contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction in margins prompted by the latest tariff revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. . --Colombia EBITDA and EBIT for the Colombian distribution business varied very little compared to the same period last year as the 11% increase in sales (to Euro 138 million) was offset by the higher power Higher power is a term used in a 12-step program, such as Alcoholics Anonymous, to describe "a power greater than yourself." Although many participants equate their higher power with God, a belief in God or in formal religion is not mandatory; the higher power is intended as a purchase costs and the increase in fixed costs. --Brazil Sales in the Brazilian distribution business stood at Euro 269 million, a 17% increase from the first quarter of 2004. This increase was due to the advance in volumes, and, to a lesser extent, to the rise in prices. This led to an EBITDA of Euro 58 million and EBIT of Euro 45 million - an advance of 31.8% and 45.2% respectively vs. 2004. --Peru EBITDA from the Peruvian distribution business remained unchanged vs. 2004 at Euro 18 million while EBIT fell by Euro 1 million. This was due to the similar performance marked by sales (Euro 71 million, +14.5% vs. 2004) and power purchases (+15.8%). --Argentina EBITDA and EBIT in the Argentinean distribution business fell by Euro 4 million vs. 2004. This was because 2004 figures included Euro 10 million corresponding to the compensation received from Alsthom due to the Arzopardo supply incident. Stripping out this impact, EBITDA and EBIT would have grown by 38% and 60%, respectively. Financial results: 9% improvement in financial expenses Financial results for the group's business in Latin America reflected a loss of Euro 71 million in the first quarter of 2005, a fall of Euro 42 million on the same quarter in 2004. Of this figure, Euro 30 million corresponded to exchange differences (a positive amount of Euro 50 million in the first quarter of 2005 vs. Euro 20 million in the same period last year). Net financial expenses totalled Euro 121 million, Euro 12 million, or 9%, lower than in 2004. Net debt at ENDESA's Latin American business stood at Euro 5,478 million at 31 March 2005, increasing by Euro 128 million since the beginning of the year. This increase in net debt is due to the depreciation of the euro against the currencies in which the group's Latam subsidiaries hold their debt, which has prompted an total increase of Euro 193 million. Stripping out the impact of this depreciation, debt at this division would have fallen by Euro 65 million. Cash flow: growth of 23.6% Cash flow generated by the group's business in Latin America totaled Euro 288 million in the first quarter of 2005, an increase of 23.6% with respect to 2004. Investments: Euro 103 million Investments in the Latin American electricity market were Euro 103 million in the first quarter of the year. Of this sum, Euro 76 million was capex - broken down as follows:
INVESTMENT IN LATIN AMERICA
-----------------------------------------------------------------
Euro million
-----------------------------------------------------------------
1Q 2005 1Q 2004 % chg
-----------------------------------------------------------------
Generation 21 68 -69.1%
-----------------------------------------------------------------
Distribution 52 44 18.2%
-----------------------------------------------------------------
Others 3 3 -
-----------------------------------------------------------------
Total 76 115 -33.9%
-----------------------------------------------------------------
The decrease in capex was due mainly to the completion of the construction of the Ralco hydroelectric plant which came on-stream in the second half of 2004. TELECOMS Auna: a positive contribution to net income The Spanish telecoms operator Auna contributed Euro 5 million to ENDESA's net income in the first quarter of 2005 in accordance with the stake held by the utility. This is an increase of Euro 4 million compared to same period in 2004. Revenues rose 12% in the quarter to Euro 1,092.4 million and EBITDA 15% to Euro 266.7 million. At March 31 2005, Auna had 9.6 million mobile customers and over 942,461 direct access customers (35% and 13% more than at December 2004 respectively). In the first quarter of this year, ENDESA and Auna's other core shareholders started an orderly divestment process as a result of its positive valuation evolution. At 31 March 2005, ENDESA's 32.7% stake in Auna had a book value of Euro 1,070 million, much lower than the current market value of the stake according to consensus estimates. Smartcom An earlier family of communications programs for PCs and Macs from Hayes. Versions emulated several terminals and supported a variety of protocols, including the Hayes V-series. : 15% EBITDA growth The Chilean mobile company Smartcom made a negative contribution of Euro 3 million to ENDESA's net income in the first quarter of the year. Turnover exceeded Euro 50 million, an increase of 17% over the first three months of 2004 and EBITDA was 15% higher, at Euro 12.5 million. Smartcom customer base was over 1.6 million at March 31 2005, 31% more than at the end of 2004. STATISTICAL APPENDIX appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. KEY FIGURES Electricity Generation (GWh) 1Q 2005 1Q 2004 % Chg ---------------------------------------------------------------------- Electricity business in Spain and Portugal 24,506 23,847 2.8 ---------------------------------------------------------------------- Electricity business in Europe 9,299 5,384 72.7 ---------------------------------------------------------------------- Electricity business in Latin America 14,558 13,493 7.9 ---------------------------------------------------------------------- TOTAL 48,363 42,724 13.2 ---------------------------------------------------------------------- Electricity Generation (GWh) Spain and Portugal (GWh) 1Q 2005 1Q 2004 % Chg ---------------------------------------------------------------------- Mainland 21,153 20,738 2.0 ---------------------------------------------------------------------- Nuclear 6,385 6,467 -1.3 ---------------------------------------------------------------------- Coal 9,745 9,165 6.3 ---------------------------------------------------------------------- Hydroelectric 1,704 2,918 -41.6 ---------------------------------------------------------------------- Combined cycle - CCGT 1,869 1,461 27.9 ---------------------------------------------------------------------- Fuel oil 981 277 254.2 ---------------------------------------------------------------------- Renewables/CHF 469 450 4.2 ---------------------------------------------------------------------- Non-mainland 3,353 3,109 7.8 ---------------------------------------------------------------------- TOTAL 24,506 23,847 2.8 ---------------------------------------------------------------------- Electricity Generation in Europe (GWh) 1Q 2005 1Q 2004 % Chg ---------------------------------------------------------------------- Coal 4,740 1,330 256.4 ---------------------------------------------------------------------- Hydroelectric 685 479 43.0 ---------------------------------------------------------------------- Combined cycle - CCGT 2,783 1,384 101.1 ---------------------------------------------------------------------- Fuel oil 1,084 2,191 -50.5 ---------------------------------------------------------------------- Wind 7 - N/A ---------------------------------------------------------------------- TOTAL 9,299 5,384 72.7 ---------------------------------------------------------------------- Electricity Generation in Latin America (GWh) 1Q 2005 1Q 2004 % Chg ---------------------------------------------------------------------- Chile 4,301 3,953 8.8 ---------------------------------------------------------------------- Argentina 4,719 4,139 14.0 ---------------------------------------------------------------------- Peru 1,554 1,258 23.5 ---------------------------------------------------------------------- Colombia 2,855 2,834 0.7 ---------------------------------------------------------------------- Brazil 1,129 1,309 -13.8 ---------------------------------------------------------------------- TOTAL 14,558 13,493 7.9 ---------------------------------------------------------------------- Electricity sales (GWh) 1Q 2005 1Q 2004 % Chg ---------------------------------------------------------------------- Electricity business in Spain and Portugal 25,290 24,619 2.7 ---------------------------------------------------------------------- Regulated market 16,595 17,461 -5.0 ---------------------------------------------------------------------- Deregulated market 8,695 7,158 21.5 ---------------------------------------------------------------------- Electricity business in Europe 12,971 5,777 124.5 ---------------------------------------------------------------------- Electricity business in Latin America 13,492 12,948 4.2 ---------------------------------------------------------------------- Chile 2,823 2,721 3.7 ---------------------------------------------------------------------- Argentina 3,516 3,439 2.2 ---------------------------------------------------------------------- Peru 1,102 1,041 5.9 ---------------------------------------------------------------------- Colombia 2,386 2,357 1.2 ---------------------------------------------------------------------- Brazil 3,665 3,390 8.1 ---------------------------------------------------------------------- TOTAL 51,753 43,344 19.4 ---------------------------------------------------------------------- Gas sales (GWh) 1Q 2005 1Q 2004 % Chg ---------------------------------------------------------------------- Regulated market 1,331 1,192 11.7 ---------------------------------------------------------------------- Deregulated market 4,570 2,293 99.3 ---------------------------------------------------------------------- TOTAL 5,901 3,485 69.3 ---------------------------------------------------------------------- Workforce 31-03-05 31-12-04 % Chg ---------------------------------------------------------------------- Electricity business in Spain and Portugal 12,832 12,889 -0.4 ---------------------------------------------------------------------- Electricity business in Europe 2,342 2,440 -4.0 ---------------------------------------------------------------------- Electricity business in Latin America 11,886 11,735 1.3 ---------------------------------------------------------------------- Other businesses 87 93 -6.5 ---------------------------------------------------------------------- TOTAL 27,147 27,157 0.0 ---------------------------------------------------------------------- FINANCIAL DATA
Key figures 1Q 2005 1Q 2004 % Chg
----------------------------------------------------------------------
EPS (EUR) 0.53 0.42 27.0
----------------------------------------------------------------------
CFPS (EUR) 0.96 0.85 12.2
----------------------------------------------------------------------
BVPS (EUR) 8.69 8.12(a) 7.0
----------------------------------------------------------------------
Net debt (Euro million) 31-03-05 31-12-04 % Chg
----------------------------------------------------------------------
Electricity business in Spain and
Portugal 10,017 9,586 4.5
----------------------------------------------------------------------
Electricity business in Europe 1,888 2,123 -11.1
----------------------------------------------------------------------
ENDESA Italia 1,317 1,285 2.5
----------------------------------------------------------------------
Others 571 838 -31.9
----------------------------------------------------------------------
Electricity business in Latin America 5,478 5,350 2.4
----------------------------------------------------------------------
ENERSIS 4,198 4,081 2.9
----------------------------------------------------------------------
Others 1,280 1,269 0.9
----------------------------------------------------------------------
Other businesses 1,673 1,639 2.1
----------------------------------------------------------------------
TOTAL 19,056 18,698 1.9
----------------------------------------------------------------------
----------------------------------------------------------------------
Gearing (%)(a) 143.7 149.6 N/A
----------------------------------------------------------------------
Net debt/operating cash flow (times) 3.2 3.4(b) --
----------------------------------------------------------------------
Interest coverage with operating cash
flow (times) 6.5 5.4(b) --
----------------------------------------------------------------------
"Rating" (11-05-05) Short
Long term term Outlook
----------------------------------------------------------------------
Standard & Poor's A A-1 Negative
----------------------------------------------------------------------
Moody's A3 P-2 Estable
----------------------------------------------------------------------
Fitch A F1 Estable
----------------------------------------------------------------------
Main fixed income issues Spread over IRS (bp)
----------------------------------------------------------------------
31-03-05 31-12-04
----------------------------------------------------------------------
0.8 Y EUR 750M 5.25% Mat. Feb 2006 8 11
----------------------------------------------------------------------
4.1 Y EUR 700M 4.375% Mat. June 2009 23 17
----------------------------------------------------------------------
7.2 Y GBP 750M 6.125% Mat. June 2012 40 33
----------------------------------------------------------------------
7.8 Y EUR 700M 5.375% Mat. Feb 2013 36 31
----------------------------------------------------------------------
Stock market data 31-03-05 31-12-04 % Chg
----------------------------------------------------------------------
Market cap (EUR millions) 18,369 18,306 0.3
----------------------------------------------------------------------
Number of shares outstanding (million) 1,058.752 1,058.752 --
----------------------------------------------------------------------
Nominal share value (EUR) 1.2 1.2 --
----------------------------------------------------------------------
Stock market data 2004 2003 % Chg
----------------------------------------------------------------------
Trading volumes (shares)
----------------------------------------------------------------------
Madrid stock exchange 643,866,930 632,705,040 1.8
----------------------------------------------------------------------
NYSE 6,841,400 10,285,600 -33.5
----------------------------------------------------------------------
Avg. daily trading volume
(shares)
----------------------------------------------------------------------
Madrid stock exchange 10,555,195 10,042,937 5.1
----------------------------------------------------------------------
NYSE 112,154 165,897 -32.4
----------------------------------------------------------------------
Share price 1Q 2005 1Q 2005
high low 31-03-05 31-12-04
----------------------------------------------------------------------
Madrid stock exchange (EUR) 18.05 16.74 17.35 17.29
----------------------------------------------------------------------
NYSE (USD) 23.40 21.85 22.59 23.27
----------------------------------------------------------------------
Dividends (Euro/s) Payable against 2004 results
----------------------------------------------------------------------
Interim dividend(a) 27.20
----------------------------------------------------------------------
Final dividend (%)(c) 46.62
----------------------------------------------------------------------
Total DPS (%)(c) 73.82
----------------------------------------------------------------------
Pay-out (%)(c) 56.7
----------------------------------------------------------------------
Dividend yield (%)(c) 4.25
----------------------------------------------------------------------
(a) At January 1st, 2005
(b) At March 31st, 2005
(c) Provisional - pending approval at the shareholders' meeting
For additional information please contact David Raya Raya may refer to:
The process by which the corporation communicates with its investors. Office, telephone 212-750-7200. http://www.endesa.es |
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