Utilities equity research

Explore the most viewed and latest equity research and media content for companies within the Utilities sector. Companies within this sector provide services including electricity generation, water, gas and multiservice utilities.

Utilities equity research

Explore the most viewed and latest equity research and media content for companies within the Utilities sector. Companies within this sector provide services including electricity generation, water, gas and multiservice utilities.

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Good adjusted results. Balance sheet weakens: capital measures, asset sales, scrip dividends

  • 15 Mar 17

In 2016, revenues decreased by 11% yoy to €38,173m, with the adjusted operating profit and net income decreasing as well, but beating expectations at €3,112m and €904m respectively (-13% and -16% respectively). The dividend proposed for 2016 is €0.21/share, which is in line with forecasts. On a reported basis, the group booked a combined net income loss of €16bn, of which -€8.4bn is attributable to E.On’s shareholder, driven by around €11bn in impairment charges. The equity attributable to E.On shareholders finished on the negative side at -€1.05bn, while the net debt of the group is higher than expected at €26.3bn, confirming the weak balance sheet situation of the company. For 2017, the group expects adjusted operating profit at the lower range of expectations of €2.7-3.1bn, implying a further expected decrease in 2017’s operating profit. However, guidance for net income and dividend payments are better than expected at €1.2-1.45bn and €0.30/share respectively. Nonetheless, the payment of the €2bn risk premium on the nuclear fund transfer will be financed through capital measures such as a capital increase of up to 10%, and the issuance of hybrid bonds as the transfer needs to come from equity and not debt. The company is targeting to reduce net debt. It has decided to reduce its investment budget by 20% and could sell Uniper’s stock, sell additional assets and a possible scrip dividend payment.



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