E.ON ups investments to $35 billion, cuts Nord Stream stake value

Posted By: ndeeney

ESSEN, Germany/DUESSELDORF, March 15 (Reuters) – E.ON (EONGn.DE), Europe’s biggest operator of energy networks, plans to raise investments in its businesses by a fifth to 33 billion euros ($35 billion), citing an increased need to connect renewable assets to the power grid.

The investment plan, which runs until 2027, also foresees the group’s adjusted core profit rising to around 9 billion euros by then, the company said in presentation slides, an increase of around 12% 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.

The company also unveiled its forecast for 2023, expecting adjusted group core profit (EBITDA) of 7.8 billion to 8.0 billion euros and adjusted net income of 2.3 billion to 2.5 billion euros.

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Shares in the company rose 1.3% in pre-market trade, with a Frankfurt-based trader saying the strong outlook should help the stock.

E.ON also cut the value of its 15.5% stake in the Nord Stream pipeline, which was damaged in September in an act of sabotage, to zero as of the end of 2022, down from around 100 million euros at the end of September.

The stake’s fair value had originally been 1.2 billion euros but was reduced gradually over the past year after Moscow cut supplies via the pipeline in the wake of its war on Ukraine.

E.ON also proposed a dividend of 0.51 euro cents for 2022, in line with the Refinitiv forecast, and confirmed its adjusted EBITDA reached 8.1 billion euros in 2022, while adjusted net income was 2.7 billion.

($1 = 0.9314 euros)

Reporting by Christoph Steitz, Editing by Paul Carrel, Friederike Heine & Shri Navaratnam

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