Endesa's Q3 Net Income Falls 27%, Weighed Down by Renewables and Generation

Spanish utility Endesa reported a 27% year-over-year decline in third-quarter net income to €492 million, according to a company announcement on Wednesday. The drop was primarily driven by significant weakness in its renewables and conventional power generation segments, though the profit figure came in 4% ahead of consensus forecasts due to lower financial expenses.

Q3 Performance in Detail

Endesa's earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter fell 12% year-over-year to €1.3 billion, a figure that matched analyst estimates. Despite the quarterly profit decline, the company's management expressed confidence in its outlook.

Endesa maintained its full-year 2026 net income guidance of more than €2.4 billion. The company also confirmed it will hold its next capital markets day in February 2027, where it will provide further details on its strategic direction to investors.

Mixed Results Across Divisions

The utility's performance was highly divergent across its business units. The Customers and Networks divisions posted strong growth, while generation segments struggled.

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• Customers: EBITDA surged 33% year-over-year to €351 million, supported by stronger retail margins.
• Networks: EBITDA increased 27% to €580 million, which the company attributed to a new regulatory framework and higher capital expenditures.
• Renewables: This segment saw EBITDA plummet 53% to €124 million, reflecting an 18% drop in hydro generation and a 9% decline in wind generation.
• Conventional Generation: EBITDA also fell, declining 21% year-over-year to €366 million.

Balance Sheet and Financial Position

Endesa's net debt rose 9% from the previous quarter to reach €11.2 billion. This resulted in a net debt to EBITDA ratio of 1.8 times and a funds from operations (FFO) to net debt ratio of 36%.

The company's results also included a negative adjustment of €84 million, which was mainly attributed to a one-off restructuring cost of approximately €0.2 billion.