Banco Sabadell reports
According to press reports, the Supreme Court has ordered the State to compensate Endesa with €255 million plus interest from 2020 onwards, for the higher fuel costs incurred in the Canary Islands and the Balearic Islands. The decision stems from the failure to enforce a previous ruling from 2024 which had already declared part of the 2022 regulation on these costs to be unlawful. Consequently, payment must be made within a maximum of one month without further administrative delays. The ruling also obliges the Government to immediately review the methodology for setting gas prices in non-mainland territories.
Assessment: positive news with limited impact (<1% market capitalisation; 2.5% DFN’25). The receipt of this compensation would have its main impact on the balance sheet, as a regulatory asset or receivable is converted into cash. In the P&L, the effect would be limited given that the revenue should already be largely recognised (as it arises from the EY expert report requested by Endesa) and would be concentrated mainly in interest receivable (financial result).
