By Christoph Steitz and Tom Käckenhoff
ESSEN, Germany/DUESSELDORF (Reuters) -E.ON, Europe’s biggest operator of energy networks, plans to boost investment in its grids and retail businesses to 33 billion euros ($35 billion) and lift core profit by 12% by 2027, it said on Wednesday, sending its shares to a one-year high.
While the company said the continent’s energy crisis wasn’t over yet, its optimistic outlook sent the shares up 2.3% to the top of Frankfurt’s blue-chip index.
The investment, which represents an increase by a fifth compared to the previous plan, foresees the group’s adjusted core profit rising to around 9 billion euros by then, the company said, 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.
For 2023, E.ON is 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.
“E.ON delivered solid 2022 results … and more importantly surprised with strong short and medium term guidance,” analysts at Citi said.
Birnbaum reiterated that Europe’s energy crisis, triggered by Moscow’s war in Ukraine, was not over yet.
“2023, too, will remain a crisis year,” the company said.
E.ON cut to zero the value of its 15.5% stake in the Nord Stream pipeline, which was damaged in September in an act of sabotage.
That was down from around 100 million euros at the end of September and 1.2 billion euros originally.
Moscow cut supplies via the pipeline to Europe in the wake of its war on Ukraine and Europe’s sanctions against it.
E.ON 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 and Tom Kaeckenhoff; Editing by Shri Navaratnam and Elaine Hardcastle)
