New Wind Projects Lead E.ON’s Renewables Figures Rise
E.ON has reported an increase in earnings in the renewables segment for the 2018 financial year, principally due to the commissioning of a new offshore wind project in the UK and the inclusion of wind farms in the U.S.
The company’s renewables segment saw EUR 521 million in adjusted EBIT, a EUR 67 million rise, caused by an increase in output due to the new wind projects and despite relatively poor wind yield.
To remind, E.ON officially opened its 400MW Rampion offshore wind farm in the UK in November 2018, after three years of construction.
Overall, E.ON’s 2018 adjusted EBIT was EUR 85 million below the prior-year figure of EUR 3.1 billion and at the upper end of its forecast range.
The company reported an adjusted net income of EUR 1.5 billion, EUR 100 million more than the year before, said to be due to a reduction in interest expenses and taxes, meaning also at the upper end of the forecast range.
E.ON’s 2018 investments of over EUR 3.5 billion surpassed the prior-year figure of EUR 3.3 billion by 6%, while the economic net debt in substantial increments has been systematically reduced.
The debt, which stood at EUR 26.3 billion in 2016 and declined to EUR 19.2 billion in 2017, equaled EUR 16.6 billion at year-end 2018, which is said to enable the start of the planned innogy takeover with a strong and healthy balance sheet.
According to Chief Financial Officer (CFO) Marc Spieker, the operating improvements in the core business were the most important earnings driver and the continuation of the success is expected in the current year as well.
For 2019, E.ON anticipates an adjusted EBIT of EUR 2.9 to EUR 3.1 billion and adjusted net income of EUR 1.4 to EUR 1.6 billion.
E.ON also expects to increase the dividend by paying shareholders 46 cents per share at a fixed rate, which follows 30 cents for 2017 and 43 cents for 2018.
“It’s important to us that our shareholders benefit from our company’s success and have planning certainty, particularly for 2019, the year of the transaction. That’s why now we’re already proposing a fixed dividend for the current year,” said Spieker.
“The third dividend increase in a row reflects E.ON’s solid business performance. Through 2020 we expect our current business portfolio to generate annual EBIT growth of 3 to 4 percent on average and our earnings per share to rise by an average of 5 to 10 percent.”