(new: share price development, statements by CFO from investor conference call, further analyst comments)

ESSEN (dpa-AFX) - The energy supplier Eon was able to match its previous year's result at the start of the year. The absence of positive one-off effects from the previous year was more than offset by investments made, the company announced in Essen on Wednesday. The operating results were in line with the company's own expectations, said CFO Marc Spieker according to the press release. Compared to analysts' expectations, the figures were mixed. The DAX-listed company confirmed its forecast for the current year. The share price rose.

Around midday, they were up a good one percent, continuing the sideways trend of the past few days. Since the beginning of the year, the share price has gained a good eight percent. Since the presentation of the annual report in mid-March in particular, the share has performed better than in the first few weeks of the year. The upward trend has then accelerated again since mid-April.

Eon's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to around 2.7 billion euros in the first quarter, as in the previous year. According to data from the Bloomberg news agency, analysts had expected less. Adjusted net income was also on a par with the previous year at just over 1 billion euros. However, analysts had expected more.

The operating profit from the network business fell by around 6% to just under EUR 1.8 billion. The expansion was unable to compensate for the positive one-off effects from the same period last year. The network business usually accounts for a good two thirds of Eon's operating profit.

The significantly smaller sales business performed much better at 867 million euros, compared to 624 million euros a year earlier. According to Eon, business in the UK in particular supported the result.

According to JPMorgan expert Javier Garrido, the positive momentum in this business area weakened somewhat over the course of the year. In addition, he believes that investors are unlikely to attach too much importance to the jump in profits in the sales business, which is limiting the share reaction somewhat.

Since the turn of the year, Eon has also been reporting its major projects with cities and municipalities separately under the name "Energy Infrastructure Solutions". Here, for example, neighborhood solutions are developed for municipalities and housing associations and district heating is also included. In the first quarter, the operating result fell by almost a quarter to EUR 163 million.

For the year as a whole, Eon aims to achieve an adjusted EBITDA of 8.8 to 9 billion euros. Even in the best-case scenario, this would still be a decline of over 4 percent compared to 2023. At that time, the fact that Eon passed on the higher energy prices caused by the war in Ukraine to customers with a delay had a positive effect. There was also a jump in earnings for the year as a whole, which is now likely to be followed by a mixed year in 2024.

However, Goldman Sachs analyst Alberto Gandolfi still sees room for improvement in the targets. After all, the figures for the first quarter are largely free of one-off effects and should therefore serve as a good indicator of the company's underlying earnings power.

When asked about the upward potential of the forecast in a conference call with analysts, CFO Spieker was relaxed. As always, the forecast refers to the middle of the issued ranges, he said. He is neither particularly aggressive nor conservative, said the manager, who will hand over his post to Nadia Jakobi in June. Spieker will then become the new Chief Sales Officer.

Aside from the figures, Eon always focuses on investments. Due to the expansion of renewable energies and the move away from energy imports from Russia, the importance of a resilient electricity grid is increasing. For example, Eon is working on connecting new solar and wind power plants and modernizing the grid infrastructure. Large investments are also needed to digitalize the planning, monitoring and control of the grids.

The Essen-based company is currently planning to invest 42 billion euros across Europe by 2028. 7.2 billion is to be invested in 2024. In the first quarter, Eon invested 1.3 billion euros. CFO Spieker said in the conference call that he still sees room for improvement, provided the regulatory conditions are right.

According to its own information, the DAX-listed company is one of the largest distribution network operators in Europe with around 1.6 million kilometers of electricity and gas lines in nine European countries. In Germany, the company is the largest distribution network operator. Of the almost 1.9 million kilometers of electricity grid, Eon operates almost 700,000 kilometers. In addition, there are 100,000 kilometers of gas network./lew/nas/stk