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innogy with sound result in first half of 2019
Adjusted EBIT of about EUR 1.3 billion and adjusted net income of about EUR 0.5 billion / Business developing as expected / Outlook for 2019 confirmed
Uwe Tigges, Chief Executive Officer of innogy SE: "The most important thing for us is to drive forward our operational business and ensure value-added development for our company. Thanks to the outstanding efforts of our employees, we achieved a good result, in spite of the special situation we find ourselves in in view of the planned E.ON/RWE transaction. The Grid & Infrastructure division is, and will remain, the backbone of our economic success. In the first half of the year, our operational grid business as usual represented a large proportion of our revenue. In Renewables, the fact that we extended our scope to international markets right from the outset has paid off. We currently have three large-scale projects simultaneously under construction: the Limondale solar plant in Australia, the Triton Knoll offshore project in the UK, and the Scioto Ridge onshore wind farm in the US. In our German retail business, we succeeded in increasing our customer numbers, with more than 180,000 new customers since the start of the year. That is excellent proof of our competitiveness in a market environment that continues to be difficult. We remain the clear market leader in the German retail business, with more than 8 million electricity and gas customers."
Bernhard Günther, Chief Financial Officer of innogy SE: "Business performance was robust for the first six months of the year. Our result declined year on year as expected; however, the figures should be looked at in detail: the Renewables division, for example, recorded a higher result, as expected. The main reasons for this were improved market prices and better weather conditions compared to the previous year. The operational business in the Grid & Infrastructure division is still on track, although the sale of the Czech gas grid business led to a decrease in the result. Competitive pressure remains high in the retail business. Higher wholesale prices for electricity and gas, the introduction of Standard Variable Tariff price caps in the UK, and regulatory intervention in Eastern Europe also had a negative impact on the result. The positive growth in new customer numbers in Germany has not yet made itself felt in the results, as is to be expected. Overall, business performance in the first half-year was in line with our forecast. We confirm our outlook for 2019."
In the Renewables division, innogy is continuing to drive forward its value-added growth strategy. The company is increasingly developing solar projects without relying on state subsidies: in Spain and Canada, innogy is currently implementing three solar projects with a total capacity of more than 100 megawatts, and in the first half-year it made the final investment decision for its first two solar projects in the US. innogy also began construction of a 250-megawatt onshore wind farm in the US in June. And in April, it officially opened its first wind farm in Ireland. In total, innogy is currently constructing projects for which its share of the total capacity amounts to 1.4 gigawatts.
The market situation in the Retail business remains highly competitive. The positive trend in customer numbers observed in the first quarter has stabilised: in Germany, its core market, innogy gained more than 180,000 new customers in the first half of 2019. Customer numbers in the Netherlands, Belgium and Eastern Europe remained stable. In the company's UK retail business, however, the persistently difficult market environment resulted in a further decline in customer numbers.
In the eMobility business area, innogy is further expanding its position in Europe with France as a new target market. innogy operates about 12,000 networked charging points in Europe and about 6,000 charging points in the US, and has sold more than 16,000 wall boxes to private and commercial customers in Europe. At the beginning of April, innogy also launched Poland's largest eCar sharing service, with 500 electric vehicles.
The Grid & Infrastructure division was successful in its German concession business during the first six months of the year, renewing contracts with about 210,000 residential users. innogy also entered into a grid cooperation agreement with one municipality, comprising 6,000 residential users. In total, innogy reliably supplies more than 14 million inhabitants throughout Germany with electricity and gas via its distribution networks.
As an operator of critical infrastructure, innogy has a particularly strong interest in cyber security in view of the growing threat arising from increasing digitalisation. In July, innogy opened the first training centre in the German-speaking countries where operators of electricity grids can practise dealing with a cyber-attack by identifying threats in good time and applying the appropriate protection and defence measures.
Capital expenditure up year on year
innogy invested EUR 991 million in the first six months of 2019, that is EUR 91 million more than in the same period the previous year. Capital expenditure was up in the Renewables division in particular, primarily due to investments in offshore wind farms in the UK, onshore wind farms in the US, the UK and the Netherlands, and the Limondale solar plant in Australia. The sale of innogy's Czech gas grid business led to much higher proceeds from disposal of assets than in the previous year.
For fiscal 2019 as a whole, innogy expects net investment to be higher than in the previous year, at about EUR 2.5 billion. This does not include the proceeds from the sale of its Czech gas grid business.
Net debt at about EUR 19.8 billion
As at 30 June 2019, innogy's net debt was about EUR 19.8 billion, a rise of some EUR 2.9 billion compared to 31 December 2018. The main underlying factors were the seasonal increase in working capital based on retail activities, and also higher provisions for pensions. The increase in debt resulting from additional lease liabilities (following adoption of the accounting regulation IFRS 16) was of a similar magnitude to the positive effects resulting from the sale of the Czech gas grid.
Decline in employee numbers
As at 30 June 2019, innogy employed 40,522 people. Part-time positions were considered in these figures on a pro-rata basis. This represents a decrease of 2,382 in employee numbers compared to 31 December 2018. The decline stems mainly from the sale of the Czech gas grid business.
This document contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management, and are based on information currently available to the management. Forward-looking statements shall not be construed as a promise for the materialisation of future results and developments and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those described in such statements due to, among other things, changes in the general economic and competitive environment, risks associated with capital markets, currency exchange rate fluctuations, changes in international and national laws and regulations, in particular with respect to tax laws and regulations, affecting the Company, and other factors. Neither the Company nor any of its affiliates assumes any obligations to update any forward-looking statements.
URL : http://news.innogy.com/first-half-2019/
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