Spain's Endesa cuts profit, dividend outlook after LNG ruling
MADRID, Nov 23 (Reuters) - Spanish power utility Endesa on Thursday cut its profit and dividend outlook as it pledged to invest 8.9 billion euros ($9.71 billion) through 2026 with a growing focus on grids.
The new guidance takes into account the impact of a court order to pay $570 million following an arbitration hearing over a long-term liquefied natural gas (LNG) supply contract with Qatar.
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The Spanish firm is now aiming for an adjusted profit, which strips out one-off items and is used to calculate dividend, of 1.1 billion euros this year and 1.6 billion-1.7 billion euros in 2024, below its previous guidance.
The target for 2026 is 2.2 billion-2.3 billion euros.
The group also introduced a dividend floor of 1 euro a share along with its 70% payout policy. Endesa now sees 2024 dividend at 1.1 euro a share, slightly below a previous forecast.
Shares in the group were down 2.3% at 0830 GMT, while the wider index was little changed.
The company slightly increased its planned investments from its previous plan, which pledged spending of 8.6 billion euros between 2023 and 2025.
Most of the increase, roughly 200 million euros, will go to grids, which tend to offer predictable returns.
Endesa earmarked a total 2.8 billion euros for this business. Investments in renewables remain stable at 4.3 billion euros.
The company released its strategic update a day after its parent Enel presented its own plan, under which it will focus its investments on power grids while being more cautious on renewable energy projects.
Some of Europe's energy giants have taken a similar stance on renewables, as the sector faces high interest rates and rising debt costs.
The executive chairman of Iberdrola, a European leader in green energy, said last month the company would be more selective in its investments. BP and Spanish power utility Naturgy have this year scaled back planned spending on renewables.
Endesa also said it expects to get roughly 3 billion euros from partnerships and asset sales, which should help cut net debt by as much as 20% in the next three years.
($1 = 0.9168 euros) (Reporting by Pietro Lombardi; Editing by Inti Landauro and Jan Harvey)