German energy company E.ON AG (EONGY.PK) reported Wednesday a net profit in its first half, compared to prior year’s loss. Adjusted EBIT, a key earnings metric, meanwhile declined with weak sales. The company further announced its plans to raise dividend payout ratio, and also reaffirmed its forecast for full-year 2017.
CEO Johannes Teyssen said, “Our operating business is performing well. We’re moving forward systemically and agilely in the second half of the year as well. Moreover, we have the flexibility for disciplined, sustainable growth.”
For the first half, net income attributable to shareholders was 3.87 billion euros, compared to prior year’s net loss of 3.03 billion euros. Earnings per share were 1.85 euros, compared to loss of 1.55 euros.
E.ON’s first-half adjusted net income was 881 million euros or 0.42 euro per share, compared to 604 million euros or 0.31 euro per share a year ago. The company said the first-half adjusted net income was in line with expectations.
Adjusted earnings before interest and tax or EBIT declined 12 percent from last year to 1.77 billion euros, due to the company’s extraordinarily weak first quarter, partly offset by a reduction in interest and tax expense. The absence of earning streams from E&P operations in the North Sea divested in 2016 impacted the results.
The company noted that second-quarter adjusted EBIT in core business of Energy Networks, Customer Solutions, and Renewables improved 25 percent year on year.
Adjusted EBITDA for the first half was 2.72 billion euros, down 6 percent from last year.
E.ON posted first-half sales of 19.58 billion euros, down 3 percent from 20.25 billion euros a year ago.
The company noted that as promised, at the halfway mark it already almost made up for extraordinarily weak first quarter, which was affected by a number of seasonal factors.
E.ON said its network business in particular delivered a good performance in all regions. Adjusted EBIT of the Energy Networks segment increased 31 percent. First-half adjusted EBIT at the Renewables segment declined
Further, the company noted that beginning with the dividend for the financial year 2018, it aims to raise its payout ratio to a minimum of 65 percent from the current 50 to 60 percent. On Tuesday, the Supervisory Board approved the Management Board’s proposal for the increase.
Looking ahead, for fiscal 2017, the company continues to expect adjusted EBIT of 2.8 billion euros to 3.1 billion euros and adjusted net income of 1.2 billion…