Eneco achieves higher results
- Eneco achieves higher results, profit after income tax rises to € 136 million (2017: € 127 million)
- Investments, acquisitions, and collaboration agreements provide a strong foundation for further growth
- Transaction phase sale of Eneco started
Eneco further improved its financial results in 2018, after strong growth in 2017. Operating profit (EBIT) rose to € 162 million in 2018 (2017: € 158 million). The gross margin and other revenues were also higher at € 1.082 billion (2017: € 1.052 billion). Revenue rose 25% to € 4.183 billion (2017: € 3.355 billion), mainly due to acquisitions. Profit after income tax was clearly higher at € 136 million (2017: € 127 million), mainly due to changes in corporate income tax.
Eneco sharpened its focus in 2018 on the execution of its strategy. An example of this is the acquisition of about 200,000 retail and business customers of the Dutch sales and delivery activities of E.ON. This resulted in an increase of the number of customer contracts in 2018 to nearly 6 million. We were thus the only large energy company to win market share in the consumer market. On the other hand, the solar energy activities in France and part of our share in Borssele III & IV were sold. A change process was also initiated within Eneco for the Dutch organisation aimed at a better customer experience, for instance, through digitalisation and an integrated customer approach. The aim of this change process is to realise an improvement of the result of € 100 million in 2020, which Eneco is well on its way to achieving.
Ruud Sondag, CEO of Eneco states: ‘We aim to realise our sustainable strategy by increasing the focus within our activities and putting the needs of our customers first in everything that we do. In this manner, Eneco can develop further in the coming years into a customer-oriented company that excels in customer service and offers a range of clean and smart products. We laid the foundation for this in 2018. In this manner, we create value for our customers, our shareholders and society in general. We wish to thank our employees warmly for their commitment, flexibility and the good result’.
Eneco facilitates the transition
Attention for customers means that Eneco also helps them to make the switch effortlessly in the energy transition. We are working together with Energie In Huis [Energy At Home], a company that increases the sustainability of existing homes. Eneco also took a minority interest in this company. Various partnerships were entered into for electric vehicle drivers (including with Jaguar Landrover Benelux) to improve the charging services. We introduced Stukje Zon [Piece of Sun] for customers who do not have the possibility to install solar panels. A good example of an integrated solution is the cooperation with Ahoy in Rotterdam. Besides solar panels, a thermal smart grid was installed to which buildings in the direct vicinity (Zuidplein) were also connected and charging stations for electric cars were installed as well.
Growth of investments
Eneco's mission remains everyone's sustainable energy. We invested in total € 248 million in 2018 (2017: € 156 million), for instance, in renewable sources such as new solar parks and wind farms (€ 121 million), for example the Hogezandse Polder, renewable sources Nieuwe Waterweg, Slufterdam, the Belgian Cordona wind farm and Borssele III & IV.
Heat production and district heating play a crucial role in every plan for increasing the sustainability of the Dutch energy supply. Eneco invested € 78 million in heating in the past year, for example in the sustainable biomass heating plant in Utrecht that was recently put into operation.
Our gas-fired plant Enecogen was renovated for € 19 million so that it could also function as a ‘black start’, i.e. a facility to restore the high-voltage grid. It is one of Tennet's three emergency facilities in the Netherlands.
Eneco invested € 241 million in acquisitions in 2018. Besides the E.ON customer portfolio, the option to acquire full ownership of the German company LichtBlick was exercised in December.
Growth of sustainable capacity
Eneco added more than 600 MW in sustainable generation capacity of onshore wind energy and solar energy in 2018 by concluding long-term procurement agreements relating to projects of third parties, most of which will come into production in the coming years. The renewable portfolio was strengthened, in particular, by the following large contracts: Yard and Enrus for 309 MW, new and existing wind farms, Aspiravi wind Belgium for 66 MW, Nearstar Solar for 46 MW and Midden Groningen Solar for 103 MW.
In addition, Eneco expanded its offshore wind energy portfolio with more than 850MW with the financial close of Borssele III and IV and the contracting of the Belgian wind farms Mermaid and Seastar, which have a combined installed capacity of 488MW.
The decision was also taken to build a second biomass heating plant at the heating power plant in Utrecht.
Small increase in costs
Of course, growth also leads to extra costs. Total operating expenses including depreciation and amortisation rose by € 26 million (3%) to € 920 million. Besides the expenses related to consolidated acquisitions and the change process, a number of expenses were incurred in other areas. For example, extra expenses were incurred in connection with the integration of Eni Belgium and E.ON and the preparations for the privatisation.
In spite of the acquisitions, depreciation charges decreased on balance, in particular because the Prinses Amalia Wind Farm has largely been depreciated.
The shareholders and the company announced in December that the sale of Eneco would take place via a controlled auction. As was announced at the time, the transaction phase will start with advertisements in which interested parties are invited to make their interest in participation in the controlled auction known. These advertisements (enclosed below) were placed today.