E.ON Plans to Close One Quarter of its European Capacity

Germany’s E.ON and Italy’s Enel announced similar cuts, with 2013 business performances in line with expectations. Their 2013 results further prove the difficulties the industry is going through. 

“Our 2013 results clearly reflect the negative effects of a difficult economic and regulatory environment in Europe. In particular, the ramifications of policy decisions in Germany and the related insufficient market prices for conventional energy continue to have an adverse impact on our generation portfolio, which has long been a mainstay of our business. That is why in 2013 we further intensified our efforts to systematically adapt E.ON to the rapidly changing market situation,” E.ON CEO Johannes Teyssen said in a note released on Wednesday.

E.ON cut its dividend by 45% to 0.60 euros per share, also announcing to mothball one quarter of its European capacity.

‘E.ON further optimized its business portfolio in 2013. In has now generated about €20 billion from the sale of noncore assets, thereby surpassing its original target of €15 billion by a wide margin. These successful divestments give E.ON financial flexibility and enable it to focus even more closely on current challenges and opportunities,’ reads the note. 

Similarly, Enel cut its 2013 dividend by 13% to 0.13 euros per share. Its revenues decreased by 5.2% year-on-year, while its EBIT increased by 46.1% to 9,944 million euros. 

The two companies are equally divesting in Europe to increase their presence abroad. Enel is planning to divert abroad the majority of its 257 billion euros investment for the period 2014-2018.