Morningstar | Reducing Enel Chile's FVE on Foreign Exchange Volatility; Reports Higher 3Q Earnings
We are lowering our fair value estimate to $22 per share from $24 after incorporating depreciation of the Chilean peso from CLP 640 per USD 1 to CLP 695 per USD 1. We are reaffirming our narrow economic moat and stable moat trend ratings after Enel Generacion Chile reported results for the first nine months of 2018.Enel reported EBITDA $900 million, up 12% from the same year-ago period. The increase in EBITDA is mostly attributable to the addition of 1.2 GW of renewable generation through its acquisition of GHP Chile, representing a 19% increase in Enel's installed capacity. The acquisition supports Enel and Chile's renewable generation push. By 2024, Enel Chile plans to add 1.2 GWh of renewable generation. In 2018, Enel has spent 55% of its $211 million growth capital on renewable generation.
At Enel's distribution business, both energy sales and customers grew 2%, with infrastructure investments, such as smart meters, helping to drive growth. Higher water availability has continued to improve hydro generation. For the year so far, hydro generation has increased 1.5 TWh to 7.2 TWh compared with the same year-ago period.
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