Eat The Essen-based energy group Eon clearly exceeded its own expectations for the past year with an operating profit (Ebitda) of 8.1 billion euros and is therefore now also increasing its investments by six billion euros. The company announced on Wednesday that by 2027, 33 billion euros are to be invested in network expansion, the connection of renewable energies and business with electricity and gas customers. Two thirds of this is to be invested in the German home market.
Eon CEO Leonhard Birnbaum said when the annual figures for 2022 were published in Essen on Wednesday morning: “There is a boom in demand for energy infrastructure and customer-oriented energy solutions. Eon is growing with it.” For 2023, a similarly high adjusted Ebitda of 7.8 to 8.0 billion euros is expected. Shareholders are to receive a dividend of 51 cents per share for 2022, two cents more than last year.
The Essen-based company made the largest part of its profit last year with the network and customer business. Adjusted Ebitda rose from EUR 6.3 billion in the previous year to around EUR 7 billion. The networks brought in the majority, but the customer solutions also increased their profits by almost 200 million to a total of 1.7 billion euros.
Nevertheless, Birnbaum made it clear: 2023 will also be a year of crisis. “We must not lull ourselves into a false sense of security. Although wholesale prices have fallen again, they are still at a level that we thought was unthinkable before the crisis,” said Birnbaum.
He also expects the price level in 2026 to be twice as high as before the gas price crisis, and currently it is three times as high. “We’ve gotten used to it now, and I’m having a hard time with it, it gives me sleepless nights,” said the Eon boss.
While a megawatt hour (MWh) of gas still cost an average of 48 euros on the futures market in January 2019, in the first half of October 2021 almost three times that amount was due at 130 euros. At the end of December, the stock exchange price even jumped to 325 euros. In the course of 2022, it even rose to almost 700 euros per MWh at its peak. In the meantime, the prices have settled at a level of just under 130 euros.
Drastic price increase
Eon raised prices for its electricity and gas customers much later than other energy and basic suppliers. “Now our end customer prices are catching up, we kept them below the wholesale price for a long time,” says Birnbaum.
Only in January was there another drastic increase: For customers outside of the basic service, the costs sometimes double from March 1st. According to Birnbaum, it cannot be ruled out that there will be further price increases.
Eon is currently receiving a lot of criticism from its district heating customers. As early as November, some of them received additional payment requests of several thousand euros for the year 2021. The costs are also expected to increase massively again for 2022. For an average household in Hamburg, the heating costs could increase by up to 3000 euros.
>> Read about this: Eon shocks district heating customers with a surcharge of 3,000 euros
The consumer advice center considers Eon’s price increases to be illegal. The Federal Association (VZBV) is now even planning to take action against the company with a model declaratory action, as the Handelsblatt reported in advance.
“We consider these price increases to be ineffective because the price change clauses do not meet the legal requirements,” believe the consumer advocates. Eon and other district heating providers use the price formula to determine the price for their product.
The components can be specified individually. Only two elements have to be included by law: the production costs by the company and the respective conditions on the heating market.
State cartel authorities became aware of price jumps
“The price clauses are public and transparent. With distortions like last year, these clauses are now leading to results that are difficult to digest,” Birnbaum said in justification on Wednesday. You can’t just change the price clause like that. Don’t worry about the lawsuit. “We are now considering how we can continue this business – so that the customers are satisfied with it,” said the Eon boss.
The business area for sustainable energy infrastructure solutions (EIS), which also includes district heating, increased its operating profit significantly last year due to the high gas prices: Adjusted Ebitda grew by around 90 million euros compared to the previous year to around 570 million euros.
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