E.ON specifies forecast for full-year 2011 and records impairment charge
- Dividend targets for 2011 to 2013 and forecast for 2013 confirmed
- Information of Supervisory Board about plans to transform company from AG into SE
Today the E.ON Board of Management informed the Supervisory Board about the current financial situation of the company. Additionally the Supervisory Board was informed about plans to transform the company into a European Company (SE). Furthermore E.ON has published an ad-hoc-release on impairment charges of in total € 3 billion resulting from a series of triggering events.
In Italy and Spain a more pessimistic view on long-term power prices, regulatory interventions and reduced load hours for gas and coal power stations, lead to a total impairment charge of € 2.1 billion, mainly on spread generation assets in both countries. In addition, lower than expected volume and margin assumptions for some of E.ON’s Eastern European spread generation assets in Hungary and Slovakia trigger an impairment of € 0.4 billion. In Central Europe, mainly in Benelux, impairments amount to € 0.5 billion. Main effects are the earlier than previously scheduled shut down of older generation assets for profitability reasons on the back of lower volumes and margins, and lower earnings power of heat-run power stations and the consumer heat business due to adverse market developments. E.ON will shut down around 6 GW of generating capacity in the next 3 years due to regulatory requirements or due to the end of stations’ economic lifetime. Additionally E.ON is investigating further closures on a plant by plant basis due to the above mentioned subdued environment for spread generation.
Despite the aforementioned negative market developments and softer margins, the company confirms and specifies its previously communicated earnings outlook for 2011 and 2013. For the full-year 2011, E.ON now expects an adjusted EBITDA between € 9.1 and € 9.3 billion (previously between € 9.1 and € 9.8 billion) and an adjusted net income between € 2.3 and € 2.5 billion (previously between € 2.1 and € 2.6 billion). The company confirms its plans for a dividend payment of € 1 per share for the financial year 2011. A forecast for 2012 will as usual be given as part of the annual results communication in March 2012. The supervisory board conjointly approved the budget for 2012. This approval does not imply any statement regarding measures or steps to implement the program E.ON 2.0. The company’s performance program E.ON 2.0 is well on track and necessary measures to achieve the outlined targets are defined and ready for implementation. Together with E.ON’s strong capital base this will ensure the financial flexibility to execute the company’s communicated strategy in its growth areas – especially in Renewables and in the new target regions outside Europe.
E.ON continues to expect its adjusted EBITDA for full-year 2013 to be between € 11.6 and € 12.3 billion. The company also expects its adjusted net income to be between € 3.2 and € 3.7 billion and plans to pay out a dividend of minimum € 1.1 per share for the financial year 2013.
As well today, the E.ON AG Board of Management informed the company’s Supervisory Board that it plans to propose to the Annual Shareholders Meeting 2012 to transform E.ON into a European Company (Societas Europaea, or SE). The transformation into an SE would allow E.ON’s internationalization to be reflected in its form of incorporation and governance. E.ON would be the first utility to take this step. The companies registered seat will remain Düsseldorf. Essential aspects of co-determination and the constitution of the Supervisory Board consisting of 12 members with an equal number of company and employee representatives will be unaffected by a potential transformation. If approval is given, a shareholding agreement between the company and its employee representatives in Europe will be worked out. The change could then become effective by the turn of the year 2012/2013.
This press release may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group management and other information currently available to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. E.ON AG does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments.