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Unfazed

29 November 2019 by jbchevrel

E.ON SE (EOANGR) operates as an international and privately-owned energy supplier. The Company's main segments are renewable, developing and operating renewable assets, energy networks, power and gas distribution business, and customer solutions which develops energy solutions. Its CDS is in the Main index since s03. The company reported okay results with EBITDA +2% in the first nine months of the year to €3.7B. That was broadly in line with the consensus. However, the net profit was ahead of expectations, thanks to lower taxes. Net debt increased notably due to the Innogy (RWE) merger from €16.6B (as of the end of Dec-18) to €39.6B (as of the end of Sep-19). That being said, this is slightly below the €40B which the consensus had expected. Next year, net debt will be driven by the merger squeeze out and the integration costs. The EOANGR’s management remains committed to BBB rating, which CEO expects to be helped by the synergies from the merger. For the full-year, EBIT guidance has been raised slightly from a €2.9-3.1B range to a tad higher €3.1-3.3B range. EOANGR will face €500M restructuring costs in the aftermath of the merger, which is to be compared with the expectation of achieving €600-800M of synergies by 2022. The CDS didn’t react to these results, we close it at 31bp. It has kept below 50bp since the middle of last year.