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Italy's Enel beats earnings forecast but sees higher debt this year

Italy's Enel beats earnings forecast but sees higher debt this year
The new logo of Italy's biggest utility Enel is seen inside its flagship store in downtown Milan, Italy, May 4, 2018. REUTERS/Stefano Rellandini   -   Copyright  STEFANO RELLANDINI(Reuters)
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MILAN (Reuters) – Italy’s Enel <ENEI.MI> stuck to its earnings outlook on Tuesday after beating nine-month forecasts but raised its debt target for the year partly because of acquisitions and currency swings.

Enel, one of Europe’s most indebted utilities, said it now expected net debt this year to be between 41 billion and 42 billion euros ($46 billion-$48 billion), about 1 billion to 2 billion euros higher than a previous target.

In June it agreed to spend almost $1.5 billion to buy a majority stake in Brazilian power company Eletropaulo <ELPL3.SA> and also said it could spend more than $2.3 billion to buy a Latin American fibre company.

Last year it bought Brazilian power distributor CELG for about $640 million.

But the group, one of the world’s biggest listed green energy companies, said it expected higher cash flow this year and confirmed its core earnings outlook of 16.2 billion euros.

Ordinary earnings before tax, depreciation and amortisation in the first nine months rose 6.2 percent to 12 billion euros, boosted by its green energy business and better margins in Brazil after the Eletropaulo acquisition.

“Renewables were once again the basis for the group’s positive performance while geographic diversification was important to cope with the negative trend in certain currencies,” CEO Francesco Starace said.

(Reporting by Stephen Jewkes; Editing by Edmund Blair)

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