By Scott Kanowsky
Investing.com -- Shares in Spain's Endesa SA (BME:ELE) fell on Wednesday after it warned that income over the next two years will be hit by a proposed tax on the country's energy utility firms.
In a statement, Endesa said that the new levies would lead to a decrease of between €250 million to €300M (€1 = $1.0362) in both 2023 and 2024 to the group's net profit.
However, the company added that it now expects net earnings to come in at between €2.2B - €2.3B in 2022, up from a previous estimate of €1.8B. The figure would then slide to €1.4B - €1.5B in 2023 and €1.7B - €1.8B in 2024.
The announcement, given during an unveiling of Endesa's strategic update for its financial years up to 2025, comes as Spanish prime minister Pedro Sanchez has argued that the tax would help protect people struggling to pay their bills due to soaring inflation and elevated energy prices.
Power utilities in Spain, who have seen profitability boosted by the higher prices, have said they will mount legal challenges against the tax in courts.