EnBW speeds up coal exit as grid, renewables profits to soar
- Expects 2023 core profit of 4.7-5.2 bln euros
- Proposes dividend of 1.10 euro/shr for 2022
- Coal phase-out to be accelerated to 2028
FRANKFURT/DUESSELDORF, March 27 (Reuters) - German utility EnBW (EBKG.DE) expects its core profit to rise by as much as 58% in 2023 on the back of its energy networks, renewables and trading divisions, reason enough for the group to accelerate its coal power phase-out by seven years.
EnBW, one of Germany's largest utilities, operates 4.3 gigawatts (GW) of lignite- and hard coal-fired power plants, accounting for a third of its total installed capacity. This compares with 5.4 GW of renewable capacity.
EnBW came under pressure last year when its VNG (VNG.UL) trading division had to cope with Russia's move to curtail and then halt gas supply via the Nord Stream pipeline, which led to a funding agreement but no state bailout.
On Monday, EnBW moved forward its planned phase-out of coal-fired power generation to 2028 from 2035, a target already ahead of the 2038 deadline set by the government.
"This will accelerate our path towards climate neutrality," Chief Executive Andreas Schell said during the group's annual news conference.
"However, one thing is also clear: achieving our goals requires the increased expansion of renewable energies and grids in Germany, as envisaged by the German government."
EnBW, which proposed an unchanged dividend of 1.10 euros per share for 2022, plans gross investments of 14 billion euros ($15 billion) by 2025, three-quarters of which are allocated to the expansion of grids and renewables.
A process to sell a 49.9% stake in its power grids division TransnetBW is also well underway, EnBW said.
For 2023, the company expects an adjusted core profit (EBITDA) of 4.7 billion to 5.2 billion euros, after an 11% increase last year to 3.3 billion. Profits in 2022 were impacted by charges related to the halt of Russian gas supplies.
"We owe this result to prudent planning and our integrated lineup across the entire value chain," Schell said.
($1 = 0.9291 euros)
Our Standards: The Thomson Reuters Trust Principles.