E.ON CFO 'extremely confident' on 2022 outlook, shares rebound
Reuters
Published May 11, 2022 06:58
Updated May 11, 2022 12:52
By Christoph Steitz and Vera Eckert
FRANKFURT (Reuters) - E.ON, Europe's largest operator of energy networks, on Wednesday posted a 15% drop in first-quarter core profit, but reassured investors its 2022 outlook was not at risk, helping shares to bounce back from a one-year low.
"We are extremely confident on our 2022 guidance. We are fully hedged and will gradually pass on higher prices to our customers," Chief Financial Officer Marc Spieker told analysts after presenting first-quarter results.
"Over the full year, our retail margins will prove to be stable."
E.ON expects adjusted core profit (EBITDA) of 7.6 billion to 7.8 billion euros ($8.02 billion to $8.23 billion) in 2022.
Shares in the company turned positive after the comments and were up 1% in mid-morning trading, having earlier fallen to their lowest level in more than a year.
E.ON blamed the decline in first-quarter revenues on "difficult market environment and high energy prices", including losses at the group's Swedish and eastern European grid divisions as well as the higher cost of procuring energy.
The group said these effects would be temporary and it would be able to recoup the related losses later.
Russia's invasion of Ukraine has triggered an increase in energy costs due to uncertainty over whether Moscow will keep sending gas to Europe despite mounting international sanctions.
A Frankfurt-based trader earlier said first-quarter numbers came in as "bad as feared". Analysts at Stifel Research called them a "shy set" of results.
E.ON, a shareholder in the Nord Stream 1 pipeline that brings Russian gas to Germany, also kept its outlook for 2022 and confirmed investment plans of 5.3 billion euros this year.
"Ending Europe's dependence on Russian energy imports will require a substantial acceleration of the energy transition. E.ON's investment program will make a decisive contribution," Spieker said.
($1 = 0.9483 euros)
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Written By: Reuters
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