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E.ON (OTCPK:EONGY) +6.2% in Wednesday's trading after Europe's largest electricity network operator raised its five-year spending target to €42B (~$46B) from previous plans to invest €33B through 2028, and guiding for 2024 profits that topped expectations.
E.ON (OTCPK:EONGY) said Europe, where it supplies ~47M customers, requires "massive expansion plans for renewable facilities that will need to be connected to networks. That's why we're investing even more and even faster in our power grid infrastructure," CFO Marc Spieker said.
Spending could even surpass the €42B target, CFO Leonhard Birnbaum told Reuters, but it would require a favorable regulatory environment that provides sufficient returns on network spending.
The company forecast adjusted EBITDA to decline to €8.8B-€9B from €9.4B last year but exceed the €8.6B analyst consensus estimate in a poll provided by the company, with adjusted net income seen at €2.8B-€3B.
FY 2023 net profit tumbled to €517M from €1.83B in 2022 on revenues that fell 19% Y/Y to €93.69B.
The company also said it proposed raising its dividend to €0.53/share for 2023, in line with expectations and up from €0.51/share in 2022.
"E.ON will be a major beneficiary of the current strong operating environment. In our view today's medium-term outlook will be a major re-rating catalyst," Barclays analysts said.