Kepler cuts Enel Green Power 2012 EBITDA estimates on lower hydropower output

Oct 29, 2012 - Kepler cut today the earnings before interest, tax, depreciation and amortisation (EBITDA) forecasts for Italy's Enel Green Power (BIT:EGPW) to EUR 1.652 billion (USD 2.132bn) for 2012 from EUR 1.698 billion expected earlier, due to the lower hydropower output.

Kepler also expects Enel Green Power's cost of debt higher than the previously expected, at 5.3% compared with 5%, and a higher tax rate -- 36.5% versus 35%. Those are expected to eat up 12% of the group's 2012-2014 earnings per share (EPS).

Kepler now sees Enel Green Power's EBITDA at EUR 2.1 billion in 2016, below the company's EUR-2.6-billion guidance, after EUR 5.6 billion in combined investments in 2012-2016, compared with EUR 6.1 billion set in the group's plan.

For the third quarter of 2012 -- with figures due out on November 12 -- Kepler sees Enel Green Power's EBITDA to have grown by 1.9% annually to EUR 314 million, thanks to launch of new capacities which are seen to have partially offset lower hydropower generation.

The analysts see the third-quarter net profit at EUR 59 million, down by 7% on the year.

Kepler expects the investor attention to remain focused on the implementation of the group's business plan and the average cost of debt. The flexibility in managing opportunities may help the group's management confirm its 2012 target for EBITDA of some EUR 1.7 billion, the analysts said.

Kepler also confirmed its "buy" recommendation and EUR 1.70 share price target on Enel Green Power whose stock was down 2.54% to EUR 1.302 at 1310 CET on the Milan market on Monday.

(EUR 1 = USD 1.291)

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