Following the takeover of renewably energy company innogy, German electric utility E.ON increased its total debts to 39.6 billion euros (43.51 U.S. dollars) in the third quarter (Q3), the company announced on Friday.
According to E.ON, the strong increase of economic net debt by 23 billion euros was mainly reflected by the “initial consolidation of innogy operations.”
After the approval of the takeover by the European Commission, the 76.8 percent stake in innogy which was previously held by competitor RWE had been transferred to E.ON in September.
As part of an asset swap, RWE received the renewable energy business from both innogy and E.ON in return while E.ON received the energy grid and distribution business from innogy.
E.ON still manages innogy as an individual subsidiary. To finally complete the merger of the two companies, E.ON must first pay off the remaining 10 percent of shareholders who have not accepted the original takeover bid in a squeeze-out.
On Friday, E.ON announced that sales rose by 1.9 billion euros year-on-year to 23.6 billion euros in the third quarter. At the same time, adjusted EBIT for E.ON declined by 6 percent to 2.2 billion euros.
However, losses of 167 million euros in EBIT at E.ON’s sales business in Britain npower continued to pose problems for the German utility company.
E.ON announced “necessary restructuring measures” in the British market that would cost around 586 million euros. E.ON expected its combined British businesses to deliver at least 115 million euros in EBIT from 2022 onward.
As part of the restructuring process, E.ON planned to cut a substantial number of jobs at British npower. According to CEO Teyssen, only 1,300 of the 5,800 npower employees would currently work profitably with large industrial and commercial customers.
For the current fiscal year, E.ON increased its minimum forecast for adjusted EBIT from 2.9 billion to 3.1 billion euros.
Following the announcement of the Q3 figures, shares of E.ON increased strongly by more than 3 percent and stood at the top of Germany DAX index on Friday.