Operations
Electricity sales
Millions of kWh | ||||
2019 | 2018 | Change | ||
Free market | 152,588 | 152,619 | (31) | - |
Regulated market | 149,088 | 142,813 | 6,275 | 4.4% |
Total | 301,676 | 295,432 | 6,244 | 2.1% |
- of which Italy | 97,539 | 104,318 | (6,779) | -6.5% |
- of which Iberia | 89,441 | 89,639 | (198) | -0.2% |
- of which Latin America | 104,962 | 91,075 | 13,887 | 15.2% |
- of which Europe and Euro-Mediterranean Affairs | 9,734 | 10,400 | (666) | -6.4% |
This positive performance of electricity sales in 2019 essentially reflects the increase in quantities sold in Latin America, mainly in Brazil following the acquisition of Enel Distribuição São Paulo. This change was only partially offset by the reduction of electricity sold in Italy due to a decrease in sales on the regulated market following the transfer of 1.8 million customers to the free market. This factor is seen as the cause for the reduction in quantities sold in Romania as well. In Spain, the change was essentially due to reduced consumption. The Group’s retail customers totaled 69,914,992, of which 22,780,590 on the free market. At December 31, 2018, those figures were 71,117,743 and 21,478,721 respectively.
Natural gas sales
Millions of m3 | ||||
2019 | 2018 | Change | ||
Business to consumer | 3,698 | 3,704 | (6) | -0.2% |
Business to business | 6,802 | 7,474 | (672) | -9.0% |
Total | 10,500 | 11,178 | (678) | -6.1% |
- of which Italy | 4,736 | 4,761 | (25) | -0.5% |
- of which Iberia | 5,750 | 6,409 | (659) | -10.3% |
- of which Europe and Euro-Mediterranean Affairs | 14 | 8 | 6 | 75.0% |
The reduction in natural gas sales was mainly due to the aforementioned reductions in consumption in Spain.
Performance
Millions of euro | ||||
2019 | 2018 | Change | ||
Revenue | 32,544 | 33,771 | (1,227) | -3.6% |
Gross operating margin | 3,287 | 3,079 | 208 | 6.8% |
Operating income | 2,163 | 1,958 | 205 | 10.5% |
Capital expenditure | 449 | 374 | 75 | 20.1% |
The following tables shows a breakdown of performance by country in 2019.
Revenue
Millions of euro | ||||
2019 | 2018 | Change | ||
Italy | 16,042 | 16,367 | (325) | -2.0% |
Iberia | 13,867 | 14,920 | (1,053) | -7.1% |
Latin America | 1,504 | 1,443 | 61 | 4.2% |
- of which Argentina | 30 | 6 | 24 | - |
- of which Brazil | 398 | 299 | 99 | 33.1% |
- of which Chile | 268 | 255 | 13 | 5.1% |
- of which Colombia | 769 | 848 | (79) | -9.3% |
- of which Peru | 39 | 35 | 4 | 11.4% |
Europe and Euro-Mediterranean Affairs | 1,131 | 1,040 | 91 | 8.8% |
Eliminations and adjustments | - | 1 | (1) | - |
Total | 32,544 | 33,771 | (1,227) | -3.6% |
Gross operating margin
Millions of euro | ||||
2019 | 2018 | Change | ||
Italy | 2,314 | 2,233 | 81 | 3.6% |
Iberia | 715 | 676 | 39 | 5.8% |
Latin America | 243 | 158 | 85 | 53.8% |
- of which Argentina | 2 | (16) | 18 | - |
- of which Brazil | 149 | 100 | 49 | 49.0% |
- of which Chile | 17 | 19 | (2) | -10.5% |
- of which Colombia | 60 | 42 | 18 | 42.9% |
- of which Peru | 15 | 13 | 2 | 15.4% |
Europe and Euro-Mediterranean Affairs | 15 | 12 | 3 | 25.0% |
Total | 3,287 | 3,079 | 208 | 6.8% |
The increase in the gross operating margin is mainly attributable to:
- an increase in margins in Latin America due to:
- the consolidation of Enel Distribuição São Paulo beginning in June of last year (€51 million);
- an increase in revenue in Argentina following the Edesur settlement agreement with the government resolving mutual pending issues arising during the period 2006-2016 (€24 million);
- an increase of €108 million in the margin on the free market in Italy, which was only partially offset by a reduction of €27 million on the regulated market;
- a decrease in the cost ratio in Iberia.
Operating income
Millions of euro | ||||
2019 | 2018 | Change | ||
Italy | 1,609 | 1,379 | 230 | 16.7% |
Iberia | 491 | 494 | (3) | -0.6% |
Latin America | 77 | 87 | (10) | -11.5% |
- of which Argentina | (35) | (16) | (19) | - |
- of which Brazil | 44 | 52 | (8) | -15.4% |
- of which Chile | 6 | 16 | (10) | -62.5% |
- of which Colombia | 52 | 29 | 23 | 79.3% |
- of which Peru | 10 | 6 | 4 | 66.7% |
Europe and Euro-Mediterranean Affairs | (14) | (2) | (12) | - |
Eliminations and adjustments | - | - | - | - |
Total | 2,163 | 1,958 | 205 | 10.5% |
In 2019, operating income, including €1,124 million in depreciation, amortization and impairment, increased due, above all, to performance improvements in Italy, mainly for Enel Energia following the improvement in margins noted above and the decrease of €149 million in depreciation, amortization and impairment, which was essentially related to the decrease in allowances for doubtful accounts.
This positive performance was impacted by the loss recognized in other countries. In Romania, the loss of €14 million reflected an increase in the impairment of trade receivables compared with 2018.
Capital expenditure
Millions of euro | ||||
2019 | 2018 | Change | ||
Italy | 324 | 248 | 76 | 30.6% |
Iberia | 110 | 107 | 3 | 2.8% |
Latin America | - | 1 | (1) | - |
Europe and Euro-Mediterranean Affairs | 15 | 18 | (3) | -16.7% |
Total | 449 | 374 | 75 | 20.1% |
The change in capital expenditure is mainly attributable to the increase in Italy, particularly with regard to Enel Energia. This increase was due to the capitalization of costs related to the acquisition of new customer contracts.