Italy's biggest utility Enel said it would lift its minimum dividend for the 2025-2027 period to 0.46 euros per share from 0.43 euros previously and simplify its investor reward policy.
In its updated three-year plan, the state-controlled group said it would invest around 43 billion euros ($45 billion), 7 billion euros more than envisaged in the 2024-2026 strategy.
Market reaction was muted. Shares in the group opened up 0.7 per cent but then turned negative and were down 1.1 per cent at 0840 GMT slightly better than a negative Milan's blue-chip index.
"The targets outlined by the Capital Market Day largely met market expectations, but (shares are) unlikely to shine given lack of positive surprises," said Citi analysts in a report for clients.
Capital expenditure on power grids will increase around 40 per cent from the previous plan to 26 billion euros, investments in renewable projects will remain almost unchanged at 12 billion euros, while 2.7 billion euros will be devoted to customers.
The group now expects ordinary earnings before interest, taxes, depreciation and amortisation (EBITDA) to increase to 22.9-23.1 billion euros in 2025, and potentially reach up to 24.5 billion in 2027.
Net ordinary income is seen rising to 6.7-6.9 billion euros next year and surpassing 7 billion at the end of the plan.
This year, the group expects to complete a wide-ranging asset disposal plan started in late 2022 that will cut its debt to around 2.4 times core earnings, below a sector average of 3.1, the company said.
All its targets for 2024 will be met on the back of strong results at its renewable division.
With its debt in check and a cost cutting programme still running, the management team headed by Chief Executive Flavio Cattaneo will now boost capital expenditure in regulated assets and seek opportunities in offering services to data centres.
"Between 2025 and 2027, we will focus on core activities and a flexible capital allocation, increasing investments mainly on regulated assets with predictable returns that will also support the acceleration of the energy transition," Cattaneo said in a statement.
Cattaneo said the group would create a new company focused on connection assets that would offer value-added services to data centres.
The CEO, appointed in May last year with the support of Italy's right-wing government, steered the company towards a more selective approach for renewable energy projects and focused spending on Europe.
Enel said it would devote 75 per cent of investments to Europe, with the rest going to Latin America and North America.
The new dividend policy foresees a higher dividend floor and an upside potential of up to 70 per cent of net ordinary income. -Reuters