One of the news that has attracted attention in recent days is the resignation of Endesa's top leader after more than ten years in office. In effect, the president of Endesa, Borja Prado, will leave his position at the head of the electricity company at the next general meeting of shareholders that will be held on April 12. The information, advanced by sources close to the manager who are aware of the situation, has already been confirmed by the electricity company itself to the National Securities Market Commission (CNMV).
Now it remains to be seen who will take over the reins of the Spanish electricity company. In this sense, the Italian company that has a large part of the shareholders wants to place a non-executive president at the head of the Spanish electricity company. Rumors suggest that this person could be the former head of Spanish businessmen, John Rosell. In any case, the news suggests that Italy wants a person closer to its business interests. An aspect in which Borja Prado has had some friction with Enel in recent years.
There was no response to this news in the listing of Endesa's shares on the equity markets. If not, on the contrary, it remains at the same levels, very close to 22 euros by shares. That is, these actions have not driven the price, neither down nor up, but in a stable way and as it has been doing in recent days. As one of the listed companies that have appreciated the most in the last twelve months, with a profitability of around 13%. In line with the behavior of other companies in the same sector.
Endesa: Prado says goodbye
In any case, the farewell to the president of Endesa, Borja Prado, was not a total surprise. If not, on the contrary, it was a very insistent rumor that ran through the stock market of the capital of Spain. This may be one of the main reasons why prices at Endesa have not undergone special variations in equity markets. There are even some financial analysts who say that they are more concerned about who the government will be after the next elections on April 28.
On the other hand, it cannot be forgotten that this is one of the most regulated sectors of equities in our country. Beyond other technical considerations and maybe also from the point of view of its fundamentals. While on the contrary, according to the newspaper El País, the name of Joan Rosell is being considered among the candidates for non-executive president. However, José Bogas occupies the position of CEO and Enel continues to count on him. Therefore, it would not be unreasonable for him to be the replacement at the end of Borja Prado in the direction of the electric company.
With the focus on the 23 euros
In any case, and if there are no surprises in the coming days, the objective of Endesa's shares is to reach levels of 23 euros per share and even more ambitious levels. In this last aspect it will depend on how the international equity markets will evolve in the coming days. Beyond the corrections that may occur in these weeks and that would be interpreted as a profit collection before the rises of the last months. In any case, it is one of the most bullish values at the moment, despite the doubts of the last days.
However, the departure of the presidency of Endesa by Borja Prado may cause many doubts among small and medium investors. At least in the shortest term and that will depend on the news about his possible successor and what with its intentions on the business line of the first Spanish power company. In this sense, there will be no choice but to be very attentive to what may happen to the price of its shares from these precise moments. Where absolutely nothing can be ruled out since anything can happen. And where prudence will be the common denominator in the actions of small and medium investors.
Borja Prado's profile
On the other hand, it cannot be forgotten that Borja Prado had difficult relationships with the current CEO of Enel, Francesco Starace, who had placed his trust in Bogas, the Spanish CEO. This fact can of course penalize Endesa's actions in the national equity markets. Because the serious discrepancies between Italian and Spanish managers cannot go unnoticed. Now we will have to check what the aptitude of the new head of the Spanish electricity company is. In this sense, investors will be very aware of its future evolution.
Another aspect that will have to be taken into account from now on are the excellent relationships that Borja Prado had with all the political and public powers of our country. Both of one sign and of others and this is an aspect that can be lost from now on. In which case, the evolution of this company on the national stock market could be penalized. Especially when it comes to a sector as regulated as electricity is at the moment. And that it requires political support to boost its business lines, beyond other technical considerations.
In this sense, an unexplored period begins by the financial markets and of which it is still not known how it can end. Like how are you going to develop dividend policy of the company since until now it allocated all of its profits to the distribution of this payment among its shareholders. It will be necessary to verify how it is from the next few years and with a new president at the top of Endesa. Something that all investors are going to look at with a magnifying glass and that can give some or other displeasure to the shareholders of the company.
Electric fraud in 2018
Endesa detected nearly 65.000 electricity fraud in 2018 and recovered 601 million defrauded kWh, a figure that is equivalent to the electricity consumption of Palma de Mallorca for six months. The Use of new technologies and collaboration with the Security Forces and citizens are making it possible to reinforce the fight against this serious problem. In the last year alone, citizen complaints helped uncover nearly 4.000 frauds.
During the past year, four out of every ten inspections carried out by the company concluded with the fraud detection. In 48% of the cases, they were illegal hookups to the network by users without a contract and the rest, to other types of fraud, such as double connections or manipulation of the measuring equipment. Apart from these figures, it is important to note that electricity fraud is, above all, a serious problem for the safety and health of people, both for the fraudster himself and for those around him. In recent years, there have been numerous cases of fires and discharges caused by the manipulation of the facilities.
Irregular practices in connections
Another factor that aggravates the problem of fraud is the growth of cannabis crops that has occurred in recent years. These crops are frequently accompanied by illegal hookups to the electricity grid, which can lead to significant supply interruptions to the population centers in which they are carried out. A home used as an “indoor” marijuana plantation consumes the equivalent of 20 homes and the concentration of these crops in certain areas saturates the network.
Electricity fraud is detrimental to the whole of society, since it translates into an increase in the electric bill of all consumers and can put at risk both the safety and quality of supply of the rest of the customers. Furthermore, contrary to what might be believed, the bulk of electricity fraud in Spain is committed by large consumers, both companies in the industrial and service sectors as well as businesses and / or private homes with high consumption.
Technologies to combat fraud
Endesa is firmly betting on digitization within its business strategy. The application of advanced algorithms of machine learning (Machine Learning) and deep learning (Deep Learning) on the Big Data it is enabling a more efficient approach to many of the company's operations. For this reason, it is redoubling its efforts in the application of these algorithms for fraud detection, managing to improve the identification of cases and doing it more efficiently.
In addition to the use of Big Data, new technologies that have been developed in recent years to combat fraud are added. Among others, the videoscopes and tracers stand out, which allow inspecting underground installations, embedded in the walls or inaccessible to the naked eye, to detect, among other manipulations, the existence of double connections.