Italian power company Enel targeted cutting its debt mountain from buying Spain's Endesa, vowing on Thursday to cut up to nearly 11 billion euros ($16.9 billion) under a new five-year business plan.
Enel, Europe's fourth-biggest power company by market value, also said it would keep its dividend at its 2007 level of 0.49 euro a share under its 2008-2012 plan.
Enel has the highest dividend yield in western Europe's power sector at 6.88 percent.
Enel said it was targeting operating cash flow of 63 billion euros and cumulative earnings before interest, tax, depreciation and amortisation (EBITDA) of 74.5 billion euros ($116.2 billion) over the course of the plan.
"Over the next five years, we will focus on consolidating the acquisitions we have made, on technological innovation and on organic growth in our core countries," Chief Executive Fulvio Conti said in a statement. "At the same time, we will seek to optimise our portfolio, with the aim of improving the financial standing of the group."
Enel also posted 2007 net income of 3.98 billion euros ($6.21 billion), up 31 percent from the year before. EBITDA was 10.02 billion euros ($15.63 billion), up 25 percent.
Enel proposed a full 2007 dividend of 0.49 euro a share, unchanged from 2006.
Enel is targeting reduction of its debt from 55.8 billion euros ($87 billion) at the end of last year to between 45 billion euros ($70.2 billion) and 49 billion euros ($76.44 billion).
It plans to dispose of 11 billion euros ($17.16 billion) to 15 billion euros ($23.4 billion) in assets, including those it has earmarked for Germany's E.ON.
Enel's debt soared from 11.7 billion euros ($18.25 billion) at the end of 2006 because of its purchase of Spanish power company Endesa with Spanish partner Acciona.
It also wants to keep its "A" credit rating under the plan.
Enel's estimated 2008 price/earnings ratio of 13.19 is near the bottom of the western European power sector.
Conti will outline the five-year plan to analysts in London later on Thursday.
He may face questions about his role in a corruption probe in Italy into Enel's sale of its telecommunications unit in 2005.
Conti is among 11 people being investigated and has denied any wrongdoing.