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E.On boosted by networks, renewables units as innogy deal looms

Image: E.On

Image: E.On

E.On has posted a 10% rise in half-year earnings, bolstered by strong performance from its core business units as its acquisition of innogy appears in the horizon.

The German energy giant this morning posted earnings before interest and tax (EBIT) of €1.9 billion (£1.7 billion) for the first six months of 2018, up around 10% on the “weak” performance in H1 2017.

And E.On paid tribute to its renewables, networks and – in particular – customer solutions units as having contributed towards the strong early performance this year.

Renewables sales edged up nearly 5% year-on-year to €741 million on the back of higher output from newly-commissioned onshore and offshore wind farms, while its networks division posted sales of €6.1 billion, down nearly 30% sequentially but only as a result of a one-off technical effect of changes to international reporting standards.

But it was the customer solutions unit that group CFO Marc Spieker paid tribute to. Sales rose to €11.5 billion and more than 100,000 additional customers were added in the first half of 2018 despite what Spieker described as “fierce competition”.

“We’re meeting these challenges with new products, new solutions, and even better, more efficient processes, particularly for our customers,” he said.

As a result of the early performance, the company has stood by its original full year EBIT forecast of €2.8 – 2.9 billion.

But at least one eye is being cast towards its previously announced asset swap with RWE, which will see E.On acquire and integrate innogy.

Late last month E.On confirmed that it was to acquire 9.4% of innogy shares following a voluntary public takeover offer which, when combined with RWE’s 76.8% stake it is acquiring, would see it hold more than 86% of available shares.

Spieker said the company was now plotting its next move.

“Numerous options are available to us for the legal aspects of the integration after closing. We’re now focusing on the preparations for this integration and a swift antitrust approvals process,” he said.

Acquiring innogy will strengthen E.On’s grip on Europe’s energy networks sector but also bolster its customer solutions unit, a key area of growth as the company pivots away from large-scale generation.

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