ENIC - Enel Chile Benefits From Hydrology Mean Reversion And PPA Margin

2023-03-06 07:30:00 ET

Summary

• The organic effects are good hydrology conditions upon which ENIC heavily relies on the current environment as well as growth in produced volumes of electricity.
• But also commodity deflation helps the PPA margins and reduces spot price pressures too.
• There were some one-off effects that allowed for substantial deleveraging, but the good organic conditions should be the main takeaway for observers.
• The company is pretty cheap at around 7.85x conservative PE, but some discount is deserved due to the hydrology correlation with high commodity prices that makes its operations riskier.

For further details see: