Enel's Q1 Profit Rises Amid Mixed Performance in Key Markets

Italian energy giant Enel S.p.A. reported a solid start to 2025, with attributable profit climbing 6.8% year-on-year to €2.396 billion in the first quarter, driven by robust revenue growth and strategic investments in renewable energy. Total revenue surged to €22.074 billion, a 13.6% increase from Q1 2024, as the company expanded its global footprint in solar, wind, and grid infrastructure. However, mixed results from key subsidiaries like Enel Américas and lingering regulatory hurdles in Latin America highlight the complexities of its growth strategy.

Profit and Revenue Growth: A Closer Look

Enel’s profit growth outpaced its already strong performance in 2024, when attributable profit stood at €2.244 billion. The company attributed the rise to cost discipline and higher electricity generation volumes, particularly in renewables. EBITDA also edged up 1.7% to €5.974 billion, though this lagged revenue growth, signaling margin pressures in certain markets.

Operational Highlights: Renewables and Grid Investments

The company’s focus on decarbonization and grid modernization is paying dividends. Enel Américas, its Latin American subsidiary, reported a 23% year-on-year increase in renewable energy production, fueled by new solar and wind projects in Colombia and Argentina. Meanwhile, grid investments rose 11% in Q1, enhancing reliability and setting the stage for future tariff adjustments.

However, Enel Américas’ net income dropped 32% to $250 million, largely due to the divestiture of Peruvian assets and currency devaluation in Brazil. Gross debt at the subsidiary climbed 8% to $5.7 billion, with net debt surging 34% to $2.9 billion, reflecting foreign exchange pressures and rising interest rates in Brazil.

Challenges Ahead: Debt, Delays, and Dividends

While Enel reaffirmed its 2025 guidance, risks remain. In Colombia, delayed tariff reviews could delay revenue recognition, and Brazil’s 10.7% cost of debt—up from 10.3%—adds pressure to margins. Enel Américas’ decision to pause the sale of Peru’s thermal plants until gas contract terms are renegotiated further complicates its liquidity position.

Despite these headwinds, the subsidiary plans to pay a $407 million final dividend in May, bringing total 2025 payouts to nearly $800 million. This underscores Enel’s commitment to shareholder returns even amid operational turbulence.

Investment Takeaways

Enel’s Q1 results reflect a company navigating two realities: strong top-line growth in core markets and regulatory and financial headwinds in emerging regions. Investors should weigh the positives—rising renewable output, disciplined grid investments, and stable dividends—against risks like rising debt and delayed regulatory approvals.

The company’s long-term strategy remains intact, with $2.4 billion raised via a 2024 sustainability-linked bond funding green projects. Yet, its ability to balance growth with debt management in volatile markets like Brazil and Colombia will determine whether Q1’s profit gains translate into sustained value creation.

Conclusion

Enel’s Q1 performance offers a cautiously optimistic outlook. With attributable profit up 6.8% and revenue growth hitting double digits, the company is on track to capitalize on global decarbonization trends. However, the 34% jump in Enel Américas’ net debt and unresolved regulatory issues in Colombia serve as reminders of the risks inherent in its geographic diversification.

For investors, Enel’s $22.07 billion Q1 revenue and $5.97 billion EBITDA provide a solid foundation, but patience is advised. Success hinges on executing its renewable expansion plans while managing debt and navigating regulatory hurdles—a balancing act that will define Enel’s trajectory in 2025 and beyond.

Data sources: Enel S.p.A. Q1 2025 press release, Enel Américas earnings call transcript.