LS: Endesa to increase LatAm client

February 27, 2002

Endesa to increase LatAm client base 17% - Regional

Endesa Spain expects to increase client numbers in Latin America by 17% in the 2001-2006 period to 11.7 million, CEO Rafael Miranda said in a conference call Wednesday. The increase would come from US$801mn investment in organic growth, as Endesa considers that it has already reached target size. Further business opportunities however come from the cost-cutting potential in the region: Endesa identifies 25% operations and maintenance (O&M) cost reduction potential in Latin American generation to US$1.8/MWh in 2006, and 36% lower O&M and capital expenditure costs in the Latin American distribution sector to US$22.7/MWh by the same date.

Endesa reduced its exposure to Argentina during 2001 with the divestment of distributor Edenor. At December 2001, Argentine operations represented 2.8% of total Endesa investment, 5.5% of Ebit, and 5.2% of net income. Argentina also represented 39% of Endesa's 674mn Euro foreign exchange losses. In 2001, Endesa registered 23% gains in Latin American generation and 14% increases in distribution in the region. International Ebit increased 9.3% - compared to overall 7.1% growth - to 1.42bn Euros.

Endesa has four main aims for the "extraordinarily tough" Latin American market in 2001-2006: to consolidate businesses, continue organic growth, refine and maintain the Genesis cost cutting program, and proactively manage regulations, which "is probably one of the main ways of managing country risk," Martin said.

Endesa operates through Chilean holding Enersis in Latin America, where it has 12.4GW installed generation capacity and serves 10 million clients in five countries - Brazil, Argentina, Chile, Peru and Colombia.

Karl Royce

Source: BNamericas.com

Monti Aguirre
Latin American Campaigns
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