E.ON maintains high earnings despite economic crisis, E.ON AG
Release Date: 2009-08-12
2009 adjusted EBIT forecast unchanged at high prior-year level. First-half 2009 adjusted EBIT down 1% from prior-year figure. Decline in full-year adjusted net income now expected to be 5-10%Amid a severe economic crisis, E.ON’s half-year results again demonstrate the strength the Düsseldorf-based energy company derives from its broad international footprint. Geographic diversity is one of the reasons why E.ON is significantly less affected by the global economic downturn than other companies. Although industrial production has been cut substantially in many of E.ON’s core markets, resulting in tangible drops in electricity and gas consumption, E.ON’s adjusted EBIT of €5.7 billion for the first half of 2009 was just 1 percent below the very high pre-year figure. Higher earnings in E.ON’s new markets—Russia, Italy, Spain, France, and Climate and Renewables—constituted a key positive factor. E.ON’s Russian market unit increased adjusted EBIT by €71 million year on year to €34 million, due mainly to the further liberalization of Russia’s electricity market, which was recently agreed upon and implemented by the Russian government. Today, half of the electricity sold to large industrial and commercial customers is priced by market mechanisms.
In Italy, E.ON posted an adjusted EBIT of €394 million. The increase was driven mainly by the successful renegotiation of power contracts (a non-recurring effect) and by the inclusion of E.ON Produzione. E.ON was also successful in Spain, where it recorded an adjusted EBIT of €58 million. Our operations in France made a tangible contribution to the increase in adjusted EBIT posted by Central Europe West Non-regulated. Climate & Renewables’ adjusted EBIT of €52 million was significantly above the prior-year figure, mainly due to a substantial increase in installed generation capacity.
Adjusted EBIT at the Central Europe market unit was up €82 million year on year to €2,795 million. A slight improvement in network charges and further efficiency enhancements has enabled E.ON to again increase earnings in its core German market. E.ON’s newly acquired operations in France made a tangible contribution to the increase in adjusted EBIT posted by the Central Europe West Non-regulated segment. By contrast, earnings were down considerably at E.ON’s Nordic, U.K., and particularly its Pan-European Gas market units due to the economic downturn and the adverse movement of the British Pound and Swedish Krona.
E.ON increased its first-half sales by about €1.3 billion year on year to €42.5 billion. Key factors were the inclusion of operations in France and positive price effects in the sales markets at Central Europe along with the inclusion of new operations at the New Markets segment. Net income attributable to shareholders of E.ON AG of €4.3 billion and corresponding earnings per share of €2.26 were up by 45 percent and 42 percent, respectively.
E.ON continues to expect its full-year adjusted EBIT to match the high prior-year level. In the first half of the year, E.ON increased adjusted net income by 4 percent to €3.5 billion. E.ON has made a slight adjustment to its outlook and now expects the decline in full-year adjusted net income to be about 5 to 10 percent. Higher interest expenditures to finance its growth program constitute the main factor for this change.
Further efficiency enhancements, portfolio optimization, and stronger organic growth will make important contributions to E.ON’s performance going forward. E.ON has completed the validation phase of its PerformtoWin program, with which it intends to increase efficiency and productivity and to achieve lasting reductions in costs along its entire value chain. The company’s management and employee representatives in Germany have now reached an agreement on key points and a basic framework for the implementation of PerformtoWin. E.ON is now in a position to implement the measures rapidly and in a socially responsible manner. E.ON anticipates a lasting improvement potential of €1.5 billion per year which will be fully realized by 2011, although may partially impact 2009.
E.ON also intends to further improve its competitiveness by systematically reviewing the growth and earnings potential of its shareholdings and businesses. E.ON currently plans to divest €10 billion in operations by 2010.
| Type: | NORMAL |
| Company: | E.ON AG |
| Country: | 德国 |