This article first appeared on GuruFocus .
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EBITDA:EUR11.8 billion, up 3% year-on-year.
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Net Income:EUR3.9 billion, up 3% year-on-year.
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Earnings Per Share (EPS):EUR0.40, up 5% year-on-year.
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Distribution Business EBITDA:EUR4.8 billion, up 10% year-on-year.
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Generation Supply EBITDA (excl. trading and wholesale):Grew by EUR600 million.
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Recurring Free Cash Flow:EUR6.1 billion.
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Net Debt:EUR60 billion (EUR61 billion including IFRS accounting components).
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Net Debt-to-EBITDA Ratio:2.6 times.
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Capital Expenditures (CapEx):EUR3.5 billion in the first half.
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Regulated Asset Base (RAB):Approximately EUR50 billion, up EUR4.4 billion year-on-year.
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Shareholder Remuneration:EUR6.6 billion returned through dividends and share buybacks.
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Full Year 2026 EPS Guidance:Expected to land at EUR0.74, at the high end of the guidance range.
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Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Enel SpA ( ENLAY ) reported a 3% year-on-year increase in EBITDA and net income for the first half of 2026, reaching EUR11.8 billion and EUR3.9 billion, respectively, in line with expectations.
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The company's strategic focus on regulated and secured businesses has improved earnings quality, with 78% of EBITDA coming from Tier 1 countries and over 90% from low-risk regulated activities.
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Enel SpA ( ENLAY ) is on track to deliver full-year 2026 EPS at the top end of its guidance range, with a 5% increase in EPS to EUR0.40 in the first half.
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The distribution business showed strong performance, with EBITDA growing 10% year-on-year to EUR4.8 billion, driven by continued CapEx and RAB expansion.
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Enel SpA ( ENLAY ) has secured 6% EPS growth for 2026 without considering further share buybacks or acquisitions, supported by a comfortable net debt-to-EBITDA ratio of 2.6 times.
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The company is actively pursuing value-accretive brownfield opportunities, having signed agreements to add 1.5 GW of renewable capacity and 350,000 customers, with a further 15 GW pipeline under evaluation.
Negative Points
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Enel SpA ( ENLAY ) faces persistent headwinds from the Italian energy decree, which has resulted in a higher-than-expected EUR1.2 billion impact on net debt due to early payment of system charges.
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The company experienced significant FX impacts of EUR1.2 billion in the first half, which, while temporary, affected reported cash flow and net debt figures.
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Persistent curtailment in Brazil has offset improved price scenarios, preventing Enel SpA ( ENLAY ) from fully benefiting from favorable market conditions in the Northeast region.
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The company noted poor hydro resource availability in Italy, which offset recent spot price upside and negatively impacted generation results.
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Enel SpA ( ENLAY ) faces regulatory and political uncertainty in Brazil regarding the Sao Paulo concession, which could impact future operations and investment credibility.
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The company expects a potential WACC reset in Italy, which could result in a negative impact of approximately EUR120 million, although this is partially mitigated by other regulatory recoveries.
Q & A Highlights
Q: What is the latest news on the concession renewal of hydro and distribution networks in Italy? A: Flavio Cattaneo (CEO) stated that the distribution concession process is clearly defined by law and moving forward without particular concerns. Regarding hydro, the company is waiting for the appropriate time, noting that the spike of hydro concession expiries will be in 2029. He highlighted that current actions for other operators are ongoing on micro concessions that expired 10 years ago, suggesting the process is manageable.
Q: Could you provide color on the process for the Sao Paulo concession and your view on Brazil in general? A: Flavio Cattaneo (CEO) explained that Enel has significantly improved service quality indicators in Sao Paulo, moving from 31st in December 2023 to 7th in May 2026. The company has proposed two solutions to solve blackout problems: undergrounding cables or allowing more extensive tree trimming. He noted the issue is political due to Brazil's continuous election cycle, but the RAB is fully protected. The company remains in close dialogue with the Brazilian government and is confident a balanced solution is achievable, emphasizing the value of assets not included in the RAB, such as software, equipment, and backup generators.
Q: Can you give us some color on the timeline and size of the brownfield deals you're evaluating? A: Flavio Cattaneo (CEO) stated that about 15 gigawatts of brownfield assets are currently on the market, and Enel can secure around 15% to 20% of this pipeline. He reiterated that brownfield is an important driver for growth, and the company has delivered on every commitment made at the Capital Market Day, intending to do the same on M&A while remaining disciplined.
Q: Given the recent evolution of the discussion on energy prices in Italy and the energy decree, could you share your view? A: Flavio Cattaneo (CEO) clarified that the public debate often misunderstands the difference between wholesale and retail prices. The final monthly bill for residential customers is broadly in line with European levels. As an integrated operator, Enel generates and supplies electricity directly to customers, with most residential customers on fixed-price contracts, shielding them from short-term wholesale price movements. The fixed offers act as an umbrella against market volatility while maintaining stable marginality.
Q: What is the expected level of working capital deterioration for year-end? A: Stefano De Angelis (CFO) explained that the working capital change in the first nine months reflects typical seasonal trends associated with CapEx spending and inventories. He emphasized that working capital has normalized in Q4 for the past three years, and this year is expected to follow the same pattern, reassuring that the seasonality is well understood and managed.
Q: Can you provide the expected moving parts to get to your net debt for 2026? A: Stefano De Angelis (CFO) provided a detailed breakdown: approximately EUR15 billion of FFO, EUR13-13.5 billion of CapEx, EUR4.5 billion of dividends, and a reversal of hybrid bonds of approximately EUR800 million. He noted the potential first closing of brownfield acquisitions in Q4, which would impact the debt stock but not economic results. Including FX impacts, the net debt is expected to be in the range of EUR64-65 billion.
Q: Can you provide the building blocks to bridge your EBITDA target by region? A: Stefano De Angelis (CFO) stated that Italy is totally resilient, with some negatives in renewables compensated by a positive commercial trend. Spain is expected to have a very positive second half, with the EBITDA of the first half multiplied by two being a close estimate. In LatAm, recovery is expected from Chile and Brazil due to supportive market scenarios, while Colombia remains resilient. Argentina could present an important topic in Q4 regarding recognition of previous agreements. Networks are expected to grow by 9.6%-9.8%, with some EUR100 million more than previously guided.
Q: The WACC reset for Italy is expected by year-end; which level of WACC is expected at the moment? A: Stefano De Angelis (CFO) noted that a 30 basis point reduction is again the central scenario, but good news could come from the spread between Bund and BTP. He emphasized that the impact would be more or less half of the EUR120 million figure discussed, and it would not change the trajectory of network investment in Italy given the opportunities for RAB expansion and additional CapEx returns.
Q: Are you concerned about the Italian retail business? Could competition erode margins or lead to customer losses? Do you see any risk for regulatory intervention? A: Stefano De Angelis (CFO) acknowledged the risk of regulatory intervention but highlighted that Enel is the most competitive player in the market since April, a choice made to secure and reduce churn without negative margin impact. He clarified that the spread is not as high as imagined, and Enel competes not just on price but on multi-bundle offers, loyalty programs, and customer care. He emphasized the company's ability to dis-intermediate the wholesale spot price by matching generation and demand profiles, creating opportunities for fair pricing and optimization of the generation fleet.
Q: What is the strategic rationale for share buybacks at the subsidiary level? A: Stefano De Angelis (CFO) explained that some subsidiaries have under-optimized financial leverage, and buying back shares at fair prices represents an opportunity to invest in the company's own capital. He cited Endesa's buyback at EUR30 per share, a more than 30% discount to fair value, and Enel Americas' buyback at 3.5 times multiple. He noted that these companies have significant resources, including renewables, nuclear, and networks, that will create more value in the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
