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E.ON net income seen benefiting from nuclear provision transfer
[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.
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.