Nov 23 (Reuters) – Spanish power company Endesa said on Wednesday it expects to make higher profits than before this year, but high inflation and a new windfall tax in Spain will weigh on its profitability in coming years.
The company, which is 70% owned by Italian energy giant Enel, raised its net profit target for this year to between 2.2 billion euros ($2.27 billion) and 2.3 billion euros, from a previous target of 1.8 billion. euro.
Net profit would then drop to between 1.4 and 1.5 billion euros in 2023 and will be between 1.7 and 1.8 billion euros in 2024.
Earnings before interest, taxes, depreciation and amortization (ebitda) will end this year between 5,000 and 5,300 million euros, compared to a previous forecast of 4,100 million, but it is expected to fall to 4,400 and 4,700 million euros in 2023.
Electricity companies have seen their profitability increase in Spain because the prices of electricity and gas, driven by the crises in the energy market in Europe, rose faster than costs, although the Government has announced a new tax on the sector to finance aid to customers.
Endesa’s parent company Enel and other energy companies have said they will challenge the tax in court.
(1 US dollar = 0.9674 euros)
(Reporting by Tiago Brandão; editing in Spanish by Benjamín Mejías Valencia)