E.ON, the largest energy network operator in Europe, has urged Germany’s new government to enhance returns on energy networks.
The company emphasised that competitive margins are essential for increasing investment, according to a report from Reuters.
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This appeal adds to the challenges facing the new government, likely to be led by Friedrich Merz of the CDU party, following recent election results.
E.ON, along with other grid operators, has criticised Germany’s grid regulation for not being conducive to attracting the substantial investments necessary for modernising and maintaining essential power networks.
E.ON CEO Leonhard Birnbaum stated that returns were more favourable in most European countries, with Germany an exception due to its reduced returns.
“Like any company that operates sustainably, however, we never invest at any price. The prerequisite for this in Germany is a return on our network investments that’s competitive by international standards.
“We cannot invest billions that need to be refinanced […] if we don’t get sufficient interest.”
E.ON plans to keep investments stable at €43bn ($45.13bn) between 2024 and 2028, stating that further investments in network infrastructure would need competitive regulation.
Despite these challenges, its shares rose 3.8%, reaching their highest level in almost four months.
The company reported an adjusted group EBITDA [earnings before interest, taxation, depreciation and amortisation] of €9bn for 2024 – at the top end of the guidance range of €8.8bn to €9bn.
Due to higher investments in 2025, which yield higher network returns, E.ON now anticipates adjusted EBITDA of more than €11.3bn by 2028 – an increase from a previous forecast of more than €11bn.
Adjusted group EBITDA is expected to exceed €11.3bn, with adjusted group net income set to reach around €3.4bn by 2028.
E.ON has proposed raising its dividend to €0.55 per share for 2024, up from €0.53 for 2023.
Birnbaum stated: “In 2024, we delivered again. Strong group earnings prove that our business model is robust even in an environment of political and macroeconomic uncertainty. Our investments of €7.5 billion set a new benchmark for our financial strength and operational performance.
“Since our reorganisation, we’ve never invested so much. For this I’d like to say thank you to our employees. With our investments, we significantly contribute to making new energy work in Europe.”
