Enel eyes US acquisitions, vows to up investor reward in its strategy

By Francesca Landini

MILAN, Feb 23 (Reuters) - Enel ENEI.MI is interested in acquiring renewable assets in the U.S., the CEO of the Italian power utility said on Monday, adding the development of artificial intelligence was expected to boost energy demand in North America.

"We plan to focus M&A on brownfield assets," Enel's Flavio Cattaneo said, referring to plants already running or with their approval process completed.

Cattaneo, who was speaking at a press conference on the group's new strategy, also said that Enel was interested in keeping its current presence in both Chile and Brazil.

In its business plan, Enel pledged to increase its dividend per share by 6% a year on average through 2028 from 0.49 euros in 2025, sending shares up nearly 7%.

The strategy hinges on higher capital expenditures and a shift towards renewables, mainly in Europe and the U.S.

The state-controlled group will invest about 53 billion euros ($63 billion) in the 2026-2028 period, half of which will be dedicated to power grids and roughly 38% to renewables.

Under its previous three-year strategy, Enel had planned capital expenditure of 43 billion euros, 60% dedicated to the regulated business of grids and 28% to green energy projects.

Shares in the group were up 6.7% at 1515 GMT, outperforming a 1% increase for Milan's blue-chip index.

ENERGY DECREE SEEN IMPACTING FUTURE RESULTS

The stock took a hit last week after the Italian government approved a decree containing measures aimed at cutting energy costs for companies and households.

That included the reimbursement of CO2 costs to gas-fired power plants, a measure that is expected to cut wholesale power prices and weigh on Enel's results if cleared by the European Commission.

The negative impact on the group's net income is estimated at 300 million-400 million euros a year on average in the 2026-28 period, according to the utility.

Enel said the push on investment and investor rewards will increase net financial debt to about three times core earnings, from a debt-to-earnings multiple of 2.5 at the end of last year.

The company faces regulatory risks in Brazil, where its power contract for the Sao Paulo area is at risk after a cyclone in December last year disrupted electricity services.

Cattaneo, who is expected to be appointed to a second three-year term in May, said Enel was having good discussions with Brazilian authorities over the issue.

Enel also said it forecast earnings per share would grow to 0.80-0.82 euros in 2028 from 0.69 euros expected for 2025.

($1 = 0.8457 euros)