Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
Eon is set to reveal details of its planned business split in the second quarter of this year, as earnings from the German energy giant continue to fall.
Eon chief exeuctive Johannes Teyssen says in the company’s latest financial report that plans to create a spin-off energy company to divide Eon’s focus on innovative and conventional technologies is “making good progress”, and promised further details within the next few months.
“We’re taking a proactive approach and laying the groundwork for Eon to seize the many opportunities of the new energy world and for the new company to play a key role in the conventional energy world. The preparations are making good progress. We intend to announce initial details about the two companies in the second quarter,” Teyssen said.
In its 2014 financial report Eon said that “strategic renewal” will be the company’s dominant theme the year to come, but warned that earnings are expected to fall further as difficult market conditions for European generators persists.
Eon said it expects its 2015 earnings to be between €7 and €7.6 billion, down from 2014 earnings of €8.3 billion which were slightly lower than consensus expectations of €8.4 billion. The 2014 figures stand almost 10 per cent below 2013 earnings of €9.1 billion.
European utilities have come under persistent pressure over recent years as the deployment of subsidised renewable technologies undermines the profitability of conventional thermal generation.
“The earnings performance reflects the persistently difficult situation on energy markets in Germany and Europe as well as currency-translation effects and portfolio changes,” Eon said.
In reaction to the downward trend in utility profitability Eon said last year that it will focus on emerging energy innovations including renewables, distribution networks and customer solutions; while a new independent business spin-off unit will manage the group’s conventional power generation, energy trading an upstream activities.
The need to address these “fundamentally different” aspects of energy strategy mean that two “separate, distinctly focused companies” offer the best prospects for the future, said Teyssen in December last year.
Please login or Register to leave a comment.