In the area of customer solutions, the operating profit has shrunk by 44 percent to 414 million euros.
(Photo: imago images/Rupert Oberhäuser)
Dusseldorf The energy group Eon earned significantly less in the first quarter than in the same period last year due to increased procurement costs. The high energy prices, which brought Eon billions in profit last year, weighed heavily on the balance sheet in the first three months of 2022. Adjusted operating profit (Ebitda) fell by 15 percent to 2.08 billion euros, the group announced on Wednesday.
“Despite the challenges in the first quarter, we are on track to achieve our earnings targets for the 2022 financial year,” said CFO Marc Spieker. Higher procurement costs would have had a particularly negative impact on the sales business. In the area of customer solutions, the operating profit has shrunk by 44 percent to 414 million euros. “However, the temporary drop in earnings that this triggered will probably be made up for over the course of the year.”
Last year, Eon took over hundreds of thousands of customers from low-cost electricity providers who could no longer keep up with their deliveries due to the high prices and canceled contracts overnight. In order to supply these new customers, Eon had to buy electricity and gas at record prices on the stock exchange. Only some of the supply contracts are secured with long-term guarantees, and the high level of energy prices that has been going on for months is now taking its toll.
Compared to the previous year, the cost of materials, mainly the procurement of gas and electricity, more than doubled to a good 36.5 billion euros. No wonder: in December the electricity price on the German spot market averaged around 221 euros per megawatt hour. A year earlier it was 38 euros. The increase in gas was also enormous.
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According to the quarterly report, the increased costs could not be passed on to customers in the first quarter. That is likely to change in the coming weeks as energy prices rise for Eon customers. Because of the “extremely high energy prices”, CEO Birnbaum recently warned in an interview with the Handelsblatt of additional financial burdens for consumers: “As bitter as that is, we also have to pass the rising prices on to our customers.”
Eon sticks to forecast
In the networks, Eon brought in four percent less with a profit of 1.5 billion euros. The business forecast for the current year remains in place and is an adjusted EBITDA of 7.6 to 7.8 billion euros, after 7.9 billion euros last time.
>> Read here: Balance sheet check: Eon benefits from high energy prices and nuclear power
Eon also wants to invest massively in the expansion and digitalization of the distribution grids and in sustainable customer solutions. “Turning Europe’s dependency on energy imports from Russia will require a massive acceleration of the energy transition.”
The new business areas delivered surprisingly good results in the first quarter: Energy Infrastructure Solutions grew by 14 percent (Ebitda) and sales of sustainable mobility solutions even jumped by 150 percent.
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