Germany's EON says 2017 outlook on track as profits surge


Germany energy giant EON on Wednesday reaffirmed its outlook for 2017 after reporting a strong third quarter in part thanks to higher energy prices in some countries.
The Essen-based group, which booked a record loss last year as it grappled with a major restructuring, saw underlying or operating profits of 350 million euros ($406 million) between July and September, up 13 percent on last year.
Revenues were up five percent to 8.4 billion euros, boosted by a pick-up in sales in Sweden and east-central Europe and higher prices for renewables in Italy and the United States.
Looking at the year so far, EON's preferred yardstick, the group said adjusted net profit soared by 51 percent to 965 million euros.
"At the nine-month mark, your E.ON is right on track," the group said in a statement.
It added that sales for the first nine months were down one percent to 27.9 billion euros, "primarily because of higher costs charged by upstream grid operators in Germany that we passed through to our customers".
For the whole of 2017, EON said it continued to expect adjusted operating profit of 2.8 to 3.1 billion euros and adjusted net profit of between 1.2 and 1.45 billion.
Like other European generators, EON has long suffered from low wholesale electricity prices and competition from subsidised renewables.
It has also felt the pinch from the German government's decision to turn away from nuclear power following the 2011 Fukushima disaster.
EON last year spun off its gas and coal fire plants into a new subsidiary, Uniper, while it has kept clean energy sources, power grids and customer services under its own umbrella.
EON confirmed its intention to sell its 46.65-percent stake in Uniper to Finland's Fortum Oyj early next year at 22 euros per share.
"The total value received by EON from the transaction would be approximately 3.76 billion euros," EON said.
The group was also able to further reduce its massive net debt burden to 19.7 billion euros, down from 21.5 billion in the previous quarter.
EON said it had benefited from a 2.8-billion-euro refund from the German government after a court ruled earlier this year that a nuclear tax fuel it had imposed on utility firms was illegal.
EON last year booked a record loss of more than eight billion euros as it accounted for depreciations in the value of its assets linked to the Uniper spin-off.
Shares in EON rose one percent to 10.65 euros by 0815 GMT, making it one of the top climbers at the start of trading in Frankfurt.
© 2017 AFP
Germany's EON says 2017 outlook on track as profits surge Germany's EON says 2017 outlook on track as profits surge Reviewed by Alexander Von Stern on 01:25:00 Rating: 5