EON confident in assets swap with RWE as Q1 profit drops
German energy giant EON expressed confidence in its planned massive assets swap with RWE's renewable energy subsidiary, despite weaker first quarter results released Monday.
Essen-based group EON, which suffered terrible losses from 2014 until 2016 due to restructuring and Germany's abandoning of nuclear power, has since got back in the black, but its figures were down for the first quarter of 2019.
Between January and March, its adjusted net profit -- which strips out discontinued operations in the renewables segment, as well as other non-operating effects -- declined 11 percent year-on-year to 650 million euros ($730 million).
Its adjusted operating profit also fell eight percent to 1.17 billion euros.
The figures roughly tally with the expectations of analysts from financial services provider Factset, which expected adjusted net income of 626 million euros and adjusted operating income of 1.15 billion euros.
"Aside from the special case of the United Kingdom," where capped prices and keen competition saw a sharp decline in the group's profits, "our core businesses delivered a solid performance," said chief financial officer Marc Spieker.
The German energy giant has confirmed its target for adjusted operating income for 2019 is between 2.9 and 3.1 billion euros.
The adjusted net income is expected to be in the range of 1.4 to 1.6 billion euros.
Last year EON announced plans to take over German rival RWE's renewables unit Innogy as part of a complex asset swap deal set to shake up the energy sector.
"The planned transaction with RWE is right on schedule," EON said of the deal that is expected to impact the two energy giants' financials.
EON added that as expected, the European Commission in March opened an in-depth probe into the deal but that the company was "confident that it will obtain the necessary approvals in the second half of 2019".
The redistribution of assets allows the two former rivals to specialise in energy distribution and production respectively.
? 2019 AFP