You are here

E.ON net income seen benefiting from nuclear provision transfer

Tuesday, January 17, 2017 - 17:40

40464108 - 07_11_2016 - EON-RESULTS_.jpg
E.ON's transfer of 9.8 billion euros (S$14.864 billion) to a state fund set up to pay for the nuclear sector's long-term liabilities will boost the German utility's underlying net income by 200-250 million euros per year, presentation slides show.

[FRANKFURT] E.ON's transfer of 9.8 billion euros (S$14.864 billion) to a state fund set up to pay for the nuclear sector's long-term liabilities will boost the German utility's underlying net income by 200-250 million euros per year, presentation slides show.

E.ON's dividend has traditionally paid a dividend of 40-60 per cent of its underlying net income.

E.ON and peers RWE, Vattenfall and EnBW agreed in October to pay 23.6 billion euros to the fund, shaking off their long-term liabilities related to the complex storage of radioactive waste.

E.ON's share of the deal consists of 7.8 billion euros of liabilities and a two billion euro risk premium, the latter of which will be funded via an unspecified capital measure.

sentifi.com

Market voices on:

Following the cash transfer, to be made by mid-year, E.ON will still be in charge of dismantling its nuclear plants, for which it has set aside 9.7 billion euros.

Due to the lower risk associated with decommissioning compared with storage, a lower discount rate of less than one per cent will be applied to that amount, a source familiar with the matter told Reuters.

Bernstein analysts have estimated this will deliver an additional annual after-tax benefit of about 215 million euros.

REUTERS

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom