Eon plans big investment hike in grids and retail business after optimistic outlook
Eon – Europe’s biggest operator of energy networks – plans to boost investment in its grids and retail businesses to £29.1bn (€33bn) and lift core profit 12 per cent by 2027, sending its shares to a one-year high.
While the company said the continent’s energy crisis wasn’t over yet, its optimistic outlook sent the shares up 2.3 per cent to the top of Frankfurt’s blue-chip index.
The investment, which represents an increase by a fifth compared to the previous plan, foresees the group’s adjusted core profit rising to around €9bn by then, the company said, an increase of around 12 per cent compared with 2023.
“This underpins our ambition to play a leading role in advancing and shaping an accelerated energy transition in Europe,” chief Executive Leonhard Birnbaum said, adding this would require certain regulatory conditions.
For 2023, Eon is expecting adjusted group core profit (EBITDA) of €7.8-8.0bn and adjusted net income of €2.3-2.5bn.
“Eon delivered solid 2022 results … and more importantly surprised with strong short and medium term guidance,” analysts at Citi said.
Birnbaum reiterated that Europe’s energy crisis, triggered by Moscow’s war in Ukraine, was not over yet.
“2023, too, will remain a crisis year,” the company said.
Eon cut to zero the value of its 15.5 per cent stake in the Nord Stream pipeline, which was damaged in September in an act of sabotage.
That was down from around €100m at the end of September and €1.2bn originally.
Moscow cut supplies via the pipeline to Europe in the wake of its war on Ukraine and Europe’s sanctions against it.
Eon proposed a dividend of 51 cents for 2022, in line with the Refinitiv forecast, and confirmed its adjusted EBITDA reached €8.1bn in 2022, while adjusted net income was €2.7bn.
Reuters – Christoph Steitz and Tom Kaeckenhoff