Source AP ©

Enel CEO: Russian and Spanish deals complete international expansion

Enel SpA topped expectations as expanding operations overseas more than offset lower domestic production and the costs of the international shopping spree but its first-half earnings were flat.

Enel, which is part of a joint bid for Spain's Endesa SA, said its net profit for the first six months of 2007 was EUR1.98 billion (US$2.69 billion) - beating the forecast of analysts polled by Dow Jones Newswires, who forecast earnings of EUR1.87 billion (US$2.54 billion).

Earnings before interest, taxes, depreciation and amortization, the figure closely watched by analysts, was EUR4.46 billion (US$6.06 billion) in the January-June period, up 2.3 percent from Ђ4.36 billion. Revenue fell to EUR18.86 billion (US$25.63 billion) from EUR19.07 billion.

Chief Executive Fulvio Conti said Enel expected its full-year results to exceed last year's, based on expansion overseas and increased efficiency in its Italian operations.

"Enel has transformed itself into a multinational energy company," Conti said in a statement.

Enel last year bought a 30 percent stake in Russian wholesale generation company JSC OGK-5 and plans to buy the remaining 70 percent. Enel's tender with Acciona for Endesa, which values the Madrid-based utility at EUR42.5 billion (US$57.75 billion), expires Oct. 1.

Both deals have contributed to a surge in debt, which more than doubled to EUR25.07 billion (US$34.07 billion) as of June 30 from EUR11.69 billion on Dec. 31.

Conti said the Spanish and Russian deals "complete" the utility's international expansion.

Enel shares gained 0.6 percent to EUR7.39 (US$10.04) on the Milan stock exchange.

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