EON confident for 2017 after favourable winds in Q2

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German energy giant EON confirmed Wednesday its full-year forecast for 2017 after a strong performance in the second quarter helped make up for a weak start to the year.

"We announced that we would play a strong catch-up game to make up for the slow start in the first quarter," EON's finance chief Marc Spieker said in a statement.

"Our core business delivered strong earnings growth in the second quarter. This performance puts us on course for our forecast for full-year 2017, which we reaffirm today."

On an adjusted basis, the Essen-based group reported bottom-line net profit of 356 million euros ($418 million) in the period from April to June, compared with a net loss of 54 million in the second quarter of 2016.

In the preceding quarter, EON's bottom line had fallen by 20 percent on a year-on-year basis.

Second-quarter revenues climbed to 9.1 billion euros, up 1.0 percent compared with April to June 2016.

For the whole of 2017, EON is targeting adjusted operating profit of 2.8 to 3.1 billion euros and adjusted net profit of between 1.2 and 1.45 billion.

The group was already more than halfway to its goal in the first six months, booking adjusted net profit of 881 million euros between January and June.

EON highlighted a strong performance in its energy grid business, driven by Sweden, the Czech Republic and Germany.

Meanwhile, although winds were stronger this year, revenue from renewable energy fell compared with the second quarter of 2016, as the group did not sell off any more stakes in its wind farms.

The group benefited from a surprise 2.85-billion-euro windfall, after Germany's constitutional court ordered the government to refund cash it had collected from a tax on nuclear power operators since 2011.

That helped EON reduce its massive net debt burden to 21.5 billion euros, compared with 26.3 billion at the end of 2016.

EON booked total losses of more than 8.0 billion euros in 2016, writing down the value of many assets after splitting its renewables business from traditional coal and gas generation.

Like other European energy groups, it had long suffered from low wholesale electricity prices and competition from subsidised renewables.

The group's fossil fuel plants are now grouped together in a subsidiary, Uniper, while it has kept clean energy sources, power grids and customer services under its own umbrella.

Chief executive Johannes Teyssen said EON was looking at "all possible options" to divest itself of its stake in Uniper.

A government-imposed plan to abandon all nuclear power generation in Germany following the 2011 Fukushima disaster has also hit the company hard, as plant operators have been called on to foot the bill for shutting down reactors and cleaning up waste.

While analysts hailed its result as better than expected, EON stock lost ground in Frankfurt trading, falling 1.36 percent to 8.78 euros ($10.30) just before 1200 GMT, roughly in line with the DAX index of leading German shares.


© 2017 AFP

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