Profits from Eon’s retail arm in the UK saw a big jump in 2016 despite the supplier losing around 600,000 customers.
The boost in earnings was attributed to reduced costs and government-mandated energy efficiency measures.
There was a 14 per cent year-on-year rise in the supplier’s adjusted earnings before interest, tax, amortisation and depreciation (EBITDA) to €460 million (£400 million) and its adjusted earnings before interest and tax (EBIT) grew by 31 per cent to €365 million (£317 million).
However, the fall in the value of the pound and lower sales, in part due to the flight of customers, meant revenues were down 19 per cent at €7.8 billion (£6.8 billion). Eon ended the year with around 7 million customers in the UK.
The picture for the Eon group as a whole was consirably worse. Adjusted EBITDA was down 15 per cent at €4.9 billion and adjusted EBIT fell 13 per cent to €3.1 billion. Revenues dropped 11 per cent to €38.1 billion.
The group posted a colossal €16 billion net loss which it blamed on the “deep marks” left by the separation of its conventional generation activities into the new company Uniper – including €11 billion of impairment charges and €3.6 billion of currency losses relating to the spin-off – as well contributions towards a nuclear waste storage fund in Germany. Adjusted net profits were down 16 per cent at €904 million. Eon reported a €6.4 billion net loss in 2015.
Eon chief executive Johannes Teyssen said: “2016 was a transitional year. The impact on our balance sheet marks a turning point and clears Eon’s way into the new energy world. It enables us to focus all our energy on our three core businesses: energy networks, customer solutions, and renewables.”
Eon expects its adjusted EBIT to be between €2.8 billion and €3.1 billion in 2017 and its adjusted net profits to be between €1.2 billion and €1.45 billion. It is aiming to achieve annual cost savings of €400 million by 2018 through a three per cent reduction in its headcount and a “more customer-centric setup”.
Commenting on the results, head of the Global Energy Research Network at Warwick Business School, David Elmes, said: “Eon would desperately like to draw a line under the old company that generated electricity from fossil fuels and now be seen as a new company with a mix of energy services and renewables.
“Today’s results throw many of the problems that change created into a huge loss, hoping markets will swallow it and let the new company flourish. It’s been a long and expensive process with dramatic steps such as the decision to split the company into two parts, Eon and Uniper, made in 2014.”
The separation of Uniper from the rest of Eon was completed in September last year when the company was floated on the Frankfurt stock exchange. Eon shareholders were allocated 53.35 per cent of the new company’s stock – receiving one Uniper share for every ten they owned in Eon. The remaining 46.65 per cent stake was retained by Eon itself.