Germany’s largest energy supplier Eon does not rule out further price increases for electricity and gas. “In the long run, we have to pass on the wholesale prices to our customers,” said Eon boss Leonhard Birnbaum on Wednesday. Last year, Eon only passed on around 30 percent of the sometimes extreme price increases in wholesale. “We can’t keep this up forever.” The price increases for electricity and gas since the beginning of the year are the result of increases in wholesale last year.

He can understand why prices are currently rising despite falling wholesale prices. According to Birnbaum, wholesale prices are falling, most of which Eon had not passed on. Eon has around 14 million electricity and gas customers in Germany.

2.7 billion euros net profit in 2022

There could also be price reductions for certain customers. For example, customers who came to new contracts with a high price level after moving would “see more price reductions this year, especially in the gas sector”, probably after the summer. Conversely, there will be customers who see further increases, especially before the summer. “That applies to gas and electricity, and that applies across the entire German industry, not just for Eon.”

The energy company confirmed the adjusted net profit for 2022 of 2.7 billion euros (plus 9 percent) that has been known since the beginning of February. The adjusted operating profit (Ebitda), which climbed by two percent year-on-year to almost 8.1 billion euros, was slightly better than predicted. The driver was the core business (sales and distribution networks), whose earnings rose by more than a tenth. Due to additional investments and subsequent earnings effects, the result in the network business grew splendidly according to group information. Overall, Birnbaum spoke of a “strong result”.

Nuclear power no longer part of the core business

The Essen-based company no longer counts nuclear power and the generation business in Turkey as part of its core business. The division’s contribution to consolidated operating profit fell by half a billion euros to 1.1 billion euros – mainly due to the shutdown of two nuclear power plants at the end of 2021.

Eon announced that it would expand its investment program. By 2027, the aim is to increase investments by around 6 billion to 33 billion euros. The majority of the additional amount is to flow into the energy grids. The Executive Board justified the additional investments with the increasing demand due to the expansion of renewable energies. “The grids are the backbone of the energy transition,” it said.

For the current year, the Executive Board expects adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of between 7.8 and 8 billion euros. The core business, i.e. the operation of the distribution networks and energy sales, should cushion a decline in income from nuclear energy. Eon expects adjusted net income to be between 2.3 and 2.5 billion euros, as originally planned for 2022.

Board of Directors confirms dividend proposal

Eon expects the three remaining nuclear power plants in Germany to be shut down on April 15 as planned. The Eon subsidiary Preussenelektra operates one of these three power plants with Isar 2 in Essenbach, Bavaria.

The Management Board confirmed the dividend proposal for 2022 of 51 cents per share. The managers are also sticking to the plan to increase the distributions by up to five percent annually until 2027.

At 69,400, the number of employees last year was almost the same as in the previous year. A good half of them worked in Germany.