DUSSELDORF, 12/08/2015
— EBITDA and underlying net income below prior-year figures, as
anticipated
— Economic net debt reduced by €4.1 billion
— Division of company into E.ON and Uniper moving forward on schedule
— Carbon intensity of E.ON’s power generation in Europe reduced by 35
percent since 1990
E.ON continues to expect its full-year 2015 EBITDA to be between €7 and €7.6
billion and its underlying net income to be between €1.4 and €1.8 billion. In
line with the company’s expectations, at the half-year mark both earnings
metrics were below the respective prior-year figures. E.ON posted half-year
EBITDA of €4.3 billion (prior year: €4.9 billion, -13 percent) and underlying
net income of €1.2 billion (€1.5 billion, -21 percent). Since the beginning of
the year, E.ON has reduced its economic net debt by €4.1 billion. Its
first-half sales of €57.3 billion were about 5 percent above the prior-year
figure. Cool temperatures at the start of the year were the primary reason E.ON
was able to increase its gas sales volume by 62 percent. E.ON affirmed its plan
to pay out a fixed dividend €0.50 of per share for the 2015 financial year as
well.
The reduction in EBITDA is primarily attributable to a further decline in
wholesale electricity prices, lower oil prices, and a weak ruble. These factors
affected earnings at three E.ON units in particular: Generation (-29 percent),
Exploration & Production (-19 percent), and Non-EU Countries (-33 percent).
EBITDA at Renewables (wind, solar, hydro) was also significantly lower (-17
percent), albeit primarily due to divestments and substantial nonrecurring
income recorded in the prior-year period. By contrast, Renewables’ earnings
began to benefit from the newly operational capacity at Amrumbank West and
Humber Gateway offshore wind farms. Earnings were higher at Germany (+6
percent) and Global Commodities (+25 percent). E.ON’s operating cash flow also
developed well, but declined from €5.5 billion year on year to €4.2 billion
owing the provisional nuclear-fuel tax refund the company recorded in the
prior-year period. Substantial operating cash flow in the first half of the
year, proceeds on disposals, and lower provisions for pensions due to higher
interest rates were among the factors that enabled E.ON to significantly reduce
its economic net debt to €29.3 billion.
In presenting E.ON’s interim results,
CEO Johannes Teyssen was
joined for the first time by new
CFO Michael Sen.
“Transforming our company during a period of extremely low power prices and
volatile oil prices is a challenge,” Sen emphasized. “Yet, we delivered solid
results. It’s important that we keep our promises, to the degree that it’s in
our control, and meet expectations of investors, customers, as well as the
general public. A solid balance sheet and strong cash flow are enabling us to
continue to make targeted, disciplined investments in the energy businesses of
tomorrow. Almost 2 gigawatts of new and efficient conventional generating
capacity will enter service at E.ON power stations in the Netherlands and
Russia in the second half of the year, along with more than 500 megawatts of
offshore wind power in the North Sea. This will have a positive effect in the
quarters ahead. In addition, we plan to build two more large offshore wind
farms, one off the U.K. coast, the other in the German Baltic Sea.”
During his presentation Teyssen alluded to the new rules to secure the
electricity supply in the United Kingdom, France, Italy, and Belgium. “Having
recognized the importance of ensuring that the electricity supply remains
reliable 24/7 into the medium and long term, these countries have already
established or will soon establish capacity mechanisms.” E.ON has successfully
placed 6 gigawatts of generating capacity in the United Kingdom’s new capacity
market. “Germany is lagging behind. Although the German federal government’s
Ten-Point Energy Agenda will bring a number of improvements for the years
ahead, it won’t establish a reliable regulatory environment for the future of
the energy supply and the implementation of the energy transition,” Teyssen
said. He added that Germany, like other European countries, needs to ensure
that highly efficient and climate-friendly reserve capacity—which consists
primarily of gas-fired capacity—is economically viable well into the
future.
Teyssen said that the preparations for dividing the company into E.ON and
Uniper are on schedule: “We’ve designed both companies’ organizational setup
and selected the people to fill the two levels of management positions below
the Management Board. These managers are now putting together the teams for
their future departments. In addition, we’re gradually also involving outside
entities, such as tax authorities and the auditor for the spinoff. The spinoff
will result in E.ON focusing primarily on renewables, energy networks, and
customer solutions, Uniper on conventional energy businesses, global energy
trading, and oil and gas production.”
Looking ahead to the UN Climate Conference in December in Paris, Teyssen
expressed confidence: “The latest G7 resolutions and the steps taken to
reinvigorate the EU Emissions Trading Scheme augur well for a global treaty to
reduce carbon emissions.” He added that E.ON’s own climate-protection efforts
are making good progress. Relative to a 1990 baseline, the company has reduced
the carbon intensity of its power generation in Europe by 35 percent. “We
intend to move resolutely forward along this path,” Teyssen said. “When it
comes to climate protection, we want to continue to be part of the
solution.”