- Has 5-10 bln eur in additional funding headroom
- 2024 core profit outlook ahead of consensus
- Frankfurt-listed shares +3.4%
ESSEN, Germany, March 13 (Reuters) - E.ON, Europe's biggest operator of energy networks, on Wednesday raised its five-year investment target to 42 billion euros ($46 billion), saying the continent required major grid expansion to make the transition to clean energy sources.
The new spending plan for the 2024-2028 period is up 27% from the 33 billion euro target for the previous 2023-2027 period, the company said, adding this would lead adjusted core profit (EBITDA) to rise to 11 billion euros by 2028.
"Across Europe, there are massive expansion plans for renewable facilities that will need to be connected to networks," E.ON Chief Financial Officer Marc Spieker said.
"That's why we're investing even more and even faster in our power grid infrastructure, which is set to continuously grow by an average of ten percent annually through 2028."
Investments could even surpass the 42 billion euro target, Chief Executive Leonhard Birnbaum told Reuters, saying this required a favourable regulatory environment that provides sufficient returns on network spending.
In presentation slides, E.ON said it has additional balance sheet capacity of 5-10 billion euros.
For 2024, the company EBITDA to decline to 8.8 billion to 9.0 billion euros, down from the 9.4 billion last year, which was marked by a number of one-offs at the group's retail energy division.
This is higher than the 8.6 billion euro average estimate in a poll provided by the company, causing E.ON's Frankfurt-listed shares to rise 3.4% by 0715 GMT as traders also cited the group's 4.32% dividend yield, the highest among Germany's listed energy firms.
E.ON said it would propose increasing its dividend to 0.53 euros per share for 2023, up from 0.51 euros each for the previous year. This is in line with the 0.53 euro LSEG estimate.
($1 = 0.9140 euros)
Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Louise Heavens and Tom Hogue
Source: Reuters