Oil Report

UPDATE 2-E.ON CEO positive on Russia, sees more investment potential

* Keeps 2014 outlook, sees EBITDA of 8-8.6 bln eur

* Has spent about 6 bln euros in Russia since 2007

* Biggest foreign investor in Russian electricity market

* Shares down 1 pct (Recasts, adds further on Russia, fuel tax)

By Christoph Steitz and Tom Käckenhoff

ESSEN, Germany, April 30 (Reuters) - E.ON remains committed to business in Russia, Germany’s largest utility said on Wednesday, seeking to reassure investors over fresh western sanctions imposed on Moscow over the crisis in Ukraine.

The European Union on Tuesday announced asset freezes and travel bans on 15 Russians and Ukrainians, a day after U.S. sanctions on seven Russians and 17 firms linked to Russia’s President Vladimir Putin.

Putin said that Moscow saw no need for counter sanctions against the West, but could reconsider the participation of Western companies in its economy, including energy projects.

“In the long-term, we view the Russian power market as stable and expect a significant need to renew capacity as well as further investment opportunities,” E.ON Chief Executive Johannes Teyssen told the group’s annual general meeting.

The company also retained its 2014 profit outlook including earnings before interest, taxes, depreciation and amortisation (EBITDA) of 8-8.6 billion euros ($11.1 billion-$11.9 billion) and underlying net income of 1.5 billion-1.9 billion.

E.ON has spent about 6 billion euros in Russia since 2007, making it the biggest foreign investor in the country’s electricity market.

“I can tell you that our working relationship with our Russian partners continues to be good,” Teyssen said.

He added it was a weaker rouble that had impacted E.ON’s earnings in Russia last year.

Russia accounted for 1.5 percent of group sales and 7.4 percent of EBITDA last year.

E.ON supplies power in Russia through local plants operated by E.ON Rossiya OAO, in which it holds more than 80 percent.

It is also a partner in Yuzhno Russkoye in Siberia, one of the world’s largest gas fields, which feeds into the Nord Stream pipeline which runs under the Baltic Sea into Germany.


Teyssen said E.ON’s business in Turkey, where it has 9 million customers via joint venture Enerjisa, came under pressure from a weak lira, but said this was not “dramatic for a long-time investor like us”.

Teyssen also said that he expected E.ON to be refunded close to 2 billion euros in nuclear fuel tax payments soon, following a preliminary decision by a Hamburg court earlier this month that said utilities should be reimbursed.

“The Federal Government is obligated to transfer these amounts in the next few days,” Teyssen said.

E.ON had said earlier this month that it would receive the refunds, but left open when. They will not have an impact on E.ON’s results as long as a final decision by the European Court of Justice about the tax is outstanding. Until then, the group needs to make provisions.