Eon doubled group first quarter revenues after bringing Innogy into the fold. Revenues stood at £15.6bn with earnings up 34 per cent to £1.29bn.
However, Eon’s UK operation fell from a £57m profit last quarter to a £12m loss after it bought troubled supplier Npower onto the books.
Eon took possession of Npower last year, following an asset swap with its former German rival RWE. Finding no buyer for the UK operation, Eon replaced Npower’s management team in September and said it would roll the two together, with up to 4,500 jobs likely to go as a result.
Last week, the company said it would also combine its UK industrial and commercial retail operations, aiming for integration by the end of 2021.
On the earnings call, Eon warned that turning Npower around will take “time and patience”. With £530 million committed to restructuring, CFO Marc Spieker reaffirmed its aim to make UK operations cash positive by 2022.
Overall, Eon’s retail businesses and network operations benefitted from Innogy’s contribution over the quarter. Retail earnings rose by a quarter to £265m, networks by £353million to £1.24bn.
The result could have been even more positive: Northern Europe’s second warmest winter on record held back the quarter’s sales by as much as £88 million, CEO Johannes Teyssen said.
March’s coronavirus lockdown arrived too late to effect the quarter’s figures – though the company warned second quarter results would reflect major reductions in demand across Europe. In the UK, industrial and commercial demand is down almost 40 per cent since the start of lockdown, Eon stated at the end of April.
As Covid-19 pushes Europe toward deep recession, the group will invest an extra €500 million this year in network upgrades, e-mobility and digital services. “We want to do our part to spur recovery,” said Teyssen. “We see interesting and promising projects with our customers, to whom we want to provide additional support.”
Attacking “the weaknesses of Germany’s misguided clean energy levies”, Teyssen urged government immediately cap its renewables levy at 5 cents per kilowatt hour.
The cut would serve as a stimulus to aid recovery from the coronavirus crisis, he suggested.
See the full results here.