E.ON to invest $ 30 billion in networks and retail, stocks fall

  • Core business adjusted EBITDA reaches € 7.8 billion by 2026
  • Proposes a dividend of 0.49 euro cent per share for 2021
  • Envisages 2 billion to 4 billion euros of portfolio adjustment products
  • Stocks drop to 4.3%

FRANKFURT / DUESSELDORF, Nov. 23 (Reuters) – E.ON’s (EONGn.DE) plan to invest around 27 billion euros ($ 30 billion) in its grids and retail electricity activities here 2026 did not convince investors on Tuesday, with shares in the German energy group dropping as much as 4.3%.

Around 22 billion euros will be spent on E.ON’s electricity and gas distribution network, the largest in Europe, and 5 billion on services for its some 50 million customers across the continent, a he announced during his capital markets day.

The investment program comes a week after RWE (RWEG.DE), Germany’s largest power producer, planned a € 50 billion spending campaign to expand its renewable energy capacity, as European energy companies are stepping up their ambitions for green energy. Read more

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At 1338 GMT, shares of E.ON were down 4%, at the bottom of the German benchmark. One trader said the announced plans, which also include medium-term profit targets, contained “no positive surprises.”

The adjusted profit before interest, taxes, depreciation and amortization (EBITDA) of its core business is expected to reach 7.8 billion euros in 2026, which would represent a compound annual growth rate of approximately 4% from 2021 to 2026, a declared E.ON.

As part of the five-year plan, E.ON is also targeting 2 to 4 billion euros in proceeds from asset disposals and partnerships, as well as additional annual savings of 500 million euros by 2026.

CEO Leonhard Birnbaum, in office since April, did not specify which assets the company could sell and whether a 16.7% stake in uranium enrichment group Urenco (URENC.UL) was also on the list. .

E.ON also proposed to pay a dividend of 0.49 euro per share for 2021, against 0.47 euro for 2020 and in line with the Refinitiv consensus.

Its current dividend policy, which provides for an annual growth rate of up to 5%, will be extended for three years until 2026, he said.

($ 1 = 0.8883 euros)

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Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Mark Potter, Louise Heavens and Jan Harvey

Our Standards: Thomson Reuters Trust Principles.

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