Germany’s EON ups dividend after beating forecasts

FRANKFURT AM MAIN (AFP) – German energy giant EON said yesterday it would pay out a higher dividend for 2018 as it reported growing profits, performing better than expected in a year of deals with major competitor RWE.

The Essen-based group – which suffered swingeing losses in 2014-16 as it launched a painful restructuring and backed out of nuclear energy – beat forecasts from analysts surveyed by Factset by increasing net profit 5.0 per cent to 1.5 billion euros (USD1.7 billion).

Bosses want to pay out more of the cash to investors, proposing a dividend of 43 euro cents per share for 2018 compared with 2017’s 30 cents. They said they want the payout to rise to 46 cents for 2019.

The fatter bottom line came as adjusted operating profits fell 3.0 per cent, to just under 3.0 billion euros.

EON’s core businesses in managing energy networks and distributing electricity were less profitable, but the group said it was still at the higher end of its forecast range.

Looking ahead to 2019, the firm is set to take over RWE’s renewable energy subsidiary RWE as part of a massive asset exchange announced early last year.

EON hopes for a green light from the European Commission “in the second half of the year”, chief executive Johannes Teyssen said, although the Brussels authority has opened an in-depth investigation into the deal.

In financial terms, the power company aims to achieve net profit of between 1.4 and 1.6 billion euros.

EON is also sitting on a reduced debt pile of 16.6 billion euros, after selling its share in former coal and gas electricity subsidiary Uniper to Finland’s Fortum.

Chairman of German energy giant EON Johannes Teyssen. – AFP