EnBW Returns to Profit in '15 on Renewables, Securities Sale

  • Utility's dividend of 55 euro cents misses BDVD estimate
  • 2016 adjusted profit forecast to fall as much as 10 percent

Energie Baden-Wuerttemberg AG, Germany’s third-largest utility, returned to profit in 2015 on earnings from renewables and a capital gain from the sale of stocks and bonds.

Net income for 2015 rose to 124.9 million euros ($141 million) compared with a net loss of 465.9 million euros a year earlier, the Karlsruhe-based company said Monday in a statement. EnBW proposed cutting its dividend by 20 percent to 55 euro cents a share, less than the 69-cent estimate by Bloomberg Dividend Forecasting.

The utility’s full-year result was bolstered by the 523 million-euro profit from a sale of securities, improved earnings from renewable energy generation and a 25 percent cut in capital spending as Germany’s shift to wind and solar power hurt margins at traditional coal and gas-fired plants. EnBW wrote down the value of its conventional generators by about 700 million euros last year. It forecast a 10 percent drop in adjusted earnings before interest, taxes depreciation and amortization for this year.

EON SE, Germany’s largest utility, reported a record annual net loss of 7 billion euros earlier this month, while RWE AG suspended its dividend payments to most shareholders after posting a net loss of 170 million euros. Both reported billions of euros of writedowns.

VNG Acquisition

EnBW’s acquisition to be concluded next month of a majority stake of Verbundnetz Gas AG, the Leipzig-based natural gas transportation company, will represent 15 percent to 20 percent of the company’s future income, Chief Executive Officer Frank Mastiaux said in the statement.

The utility holds shares and bonds valued at about 10 billion euros, Chief Financial Officer Thomas Kusterer told reporters in Stuttgart, without providing details on the company’s securities sale.

EnBW rose as much as 6.5 percent, the biggest intraday jump since Jan. 15, to 21.40 euros before trading at 21.30 euros at 12:14 p.m. in Frankfurt. The shares have risen 3.3 percent this year, compared with a 7 percent decline in the benchmark DAX index.

EnBW’s adjusted Ebitda fell 2.7 percent to 2.11 billion euros, compared with a company forecast for a drop of as much as 5 percent.

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