E.ON targets steady profits in 2019 ahead of Innogy deal

Reuters with CNBC.com
Key Points
  • The networks and renewables group said it lost about 100,000 retail customers in 2018, far fewer than the 810,000 lost by Innogy, which is battling with a client exodus in Britain following billing issues and the arrival of small competitors.
  • E.ON said it was confident of securing regulatory approval for the takeover of Innogy's customer portfolio of 21.73 million, which is subject to further investigation by the European Commission.
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German energy firm E.ON forecast on Wednesday largely stable operating earnings for 2019, expecting rising profits at its networks and renewables units to offset a decline in retail, where fierce competition is squashing margins.

E.ON, which is taking over Innogy's grid and customers businesses as part of an asset swap with Innogy's owner RWE, said adjusted earnings before interest and tax would come in at between 2.9 billion and 3.1 billion euros ($3.3 billion to $3.5 billion) this year, compared with 3 billion euros in 2018.

The networks and renewables group said it lost about 100,000 retail customers in 2018, far fewer than the 810,000 lost by Innogy, which is battling with a client exodus in Britain following billing issues and the arrival of small competitors.

E.ON said it was confident of securing regulatory approval for the takeover of Innogy's customer portfolio of 21.73 million, which is subject to further investigation by the European Commission.

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"This too was fully in line with our plans. We're confident that we'll obtain the necessary approvals in the second half of the year," E.ON Chief Executive Johannes Teyssen said.

Speaking to CNBC's Julianna Tatelbaum, Teyssen said the deal is in the interest of the consumers because it will bring more efficiency, better products, and better services.

But Teyssen wouldn't be drawn on any potential concessions that EU throws up with its investigation of the deal. "Whilst that (investigation) is being concluded we will engage in whatever dialogue the Commission (wants) ... But I'm quite confident that we will talk about only very limited things that might still have an issue for the Commission." 

E.ON said it would propose a fixed dividend of 0.46 euros per share for 2019, up from the 0.43 euros per share it plans to propose for last year.