Eon’s planned asset swap with RWE is “right on schedule” and expected to receive full regulatory approval in the second half of 2019, the company has assured in a first quarter trading update.
The deal, which will see RWE trade its 76.8 per cent interest in Innogy for a 16.67 per cent stake in Eon, its renewable portfolio and €1.5 billion in cash, was given the green light by the Competition and Markets Authority in April and is now awaiting consent from the European Commission.
Eon also said its retail arm in the UK remains under “considerable pressure” owing to “keen competition” and the price cap on default tariffs.
The results for the three months to the end of March show a 6 per cent reduction in revenues when compared to the same period in 2018 to €2.24 billion. Adjusted earnings before interest and tax (EBIT) fell more than a half from €148 million to €57 million.
At the group level, sales grew by 5 per cent year-on-year to €9.16 billion, while adjusted EBIT dropped 8 per cent to €1.18 billion.
The strongest performing segment was the renewables division which, aided by the opening of the Rampion offshore windfarm in November, reported a 19 per cent rise in revenues to €478 million and a 23 per cent increase in adjusted EBIT to €211 million.
Eon chief financial officer Marc Spieker said: “Aside from the special case of the United Kingdom, our core businesses delivered a solid performance.
“We continue to expect our 2019 adjusted EBIT to be between €2.9 and €3.1 billion and our 2019 adjusted net income to be between €1.4 and €1.6 billion,” he added. “We likewise reaffirm our dividend proposal of 46 cents per share for the 2019 financial year.”
Eon said in January it does not expect the collapse of the proposed merger between Innogy’s Npower and the retail business of SSE to have “any material effect” on its deal with RWE.
At Innogy’s annual general meeting in Germany last month, the company’s chief executive, Uwe Tigges, said that operationally Innogy is “on track” and the business is progressing as planned.
“The only exception, which unfortunately cast a major shadow over fiscal 2018, is our UK retail business ,” he said.
SSE is expected to provide an update on the future of its retail arm by the end of May.