Enel SpA (MIL:ENEL, Financial), the Italian multinational manufacturer and distributor of electricity and gas, announced on Wednesday that its renewable energy subsidiary, Enel Green Power, has begun construction on a solar photovoltaic power station in Zambia.
The company will invest approximately $40 million for the construction of the Ngonye solar park, which will be partially financed by the Republic of Zambia.
Ngonye will be the first solar photovoltaic power station built by the company in Zambia. Once the power generator unit is online, it should provide the African country with approximately 70 gigawatt hours per year.
âThe start of construction of Ngonye solar plant is a new milestone in the strengthening of the Enel Groupâs presence in the African continent, where we already are the first private renewable operator in terms of installed capacity,â Antonio Cammisecra, the head of Enel Green Power, said.
The plant is expected to begin producing electricity in the first quarter of 2019.Ă
Enel and its subsidiaries have operations in the Americas, Europe, Africa and Asia. The company is present in more than 30 countries and employs over 60,000 people. While it has a very diverse portfolio, the company's primary source of income is the production and distribution of electricity and gas.
Enel is one of the worldâs greatest companies in terms of annual turnover. The company closed fiscal 2017 with $87.53 billion in revenue and $4.53 billion in net income. In the second quarter, revenue decreased 6.6% year over year to $19.9 billion. Net income grew 12.3% to $991.2 million.
For the 52 weeks through the second quarter of 2018, Enel generated $12.2 billion in operating cash flow. The forward dividend is about 28 cents, yielding 5.4%.
The balance sheet is solid with over $13.12 billion in cash on hand and short-term securities. The war chest excludes undrawn lines of credit. The long-term debt to-equity ratio is 149.63 versus an industry median of 132.52. The interest coverage ratio, however, is 25.35, which indicates it is able to pay the interest expenses on any outstanding debt.Ă
The company has an operating margin of 13.4% versus an industry median of 39.4%, a net profit margin of 7.6% versus an industry median of 22.5%, a return on equity of 12.1% versus a median industry of 11.2% and a return on assets of 3.5% versus an industry median of 3.7%. Over the last five fiscal years, sales have declined 2.5% on average versus an annual average growth of 7.63% for the industry.
Shares of Enel were trading around $5.10 per share on the Borsa Italiana. The company has a market capitalization of $52 billion. For the 52 weeks through Aug. 23, Enel has climbed 16.5% and is trading below the 200-, 100-, and 50-day simple moving average lines. The 52-week range is $5.07 to $6.47.
The price-earnings ratio is 11.41 versus an industry median of 13, the price-book ratio is 1.46 versus an industry medina of 1.35 and the price-sales ratio is 0.62 versus an industry medina of 3.56. The forward price-earnings ratio is 9.86.
The mean recommendation rating is 1.9. The rating ranges from 1 (âStrong Buyâ) to 5 (âSellâ).
The company has about 10.17 billion shares outstanding, of which 76.4% is float.
The Italian government is the company's largest shareholder with about 25.5% of total shares outstanding. The People's Bank of China holds about 2%.
Disclosure: I have no positions in any securities mentioned in this article.
