E.ON Unit Earmarked for Spinoff Says Earnings Jump
August 22 2016 - 2:50AM
Dow Jones News
By William Wilkes and Monica Houston-Waesch
FRANKFURT--Uniper SE, the conventional power and trading unit of
E.ON SE (EOAN.XE), said Monday that its estimated first-half
earnings jumped following the strong performance of its gas
business.
The company's key performance figure, adjusted earnings before
interest, taxes and amortization, was 1.5 billion euros ($1.69
billion), up from EUR1 billion a year ago. Adjusted EBIT rose to
EUR1.1 billion from EUR500 million in the first half of 2015.
The company said changes to gas contracts from Russia and the
strong performance of its global commodities business were behind
the gains.
Uniper hasn't yet generated earnings as an independent company.
The estimated figures are included in group results E.ON reported
Aug. 10.
E.ON is set to spin off Uniper in a hybrid stock award and
listing deal in mid September. It will give shareholders one Uniper
share for every 10 E.ON shares held and list the company, shedding
over 53% of it. E.ON plans to sell the remainder over the medium
term.
Uniper Chief Executive Klaus Schäfer said improvements in the
regulatory environment outside Germany and rising wholesale energy
prices are encouraging signs for the business.
"So we enter the run-up to the listing with some momentum on the
operational side," Mr. Schäfer said.
Last week, E.ON CEO Johannes Teyssen said the book value of
Uniper was around EUR11 billion, but the market valuation is likely
to be considerably lower.
In April Uniper said it would divest at least EUR2 billion in
operations by the end of 2018 to pare debt and costs.
Companies sometimes choose spinoffs over initial public
offerings to avoid IPO fees. A spinoff can also let a company
achieve independence and immediately gain a substantial
free-float level.
Uniper has appointed J.P. Morgan and Morgan Stanley for the
listing. The price for Uniper shares will be determined on the
first day of trading, and a minimum trading price won't be
underwritten by the banks.
Uniper said earlier this year it will pay out around EUR200
million in dividends for 2016, and base future dividends on free
cash flow.
-Write to William Wilkes at william.wilkes@wsj.com
(END) Dow Jones Newswires
August 22, 2016 02:35 ET (06:35 GMT)
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