E.on increased its adjusted earnings before interest and taxation (Ebit) by 15% year-on-year to €521 million in 2018.
The German firm is in the process of buying Innogy’s grid and retail business, whith Innogy’s parent company RWE, meanwhile, receiving E.on's renewable assets.
This was due to an increase in output due to newly commissioned wind farms, and came despite a poor wind yield and decline in US subsidies.
Its renewables portfolio produced 15.8TWh in 2018 — up 13.6% from the previous year. Revenue in E.on renewables segment also increased 9% to €1.75 billion in 2018.
Last year, E.on commissioned the 400MW Rampion wind farm off the UK's south coast, and had two large US wind farms — the 228MW Bruenning’s Breeze in Texas and the 306MW Radford’s Run in Illinois — operational for the entire year.
It added that the gradual phase-out of the US production tax credit (PTC) support scheme also hit earnings from onshore wind.
E.on spent €1.03 billion in its renewables segment in 2018 — down 15% from the previous year. It plans to increase this spending for the 2019 fiscal year, however.
The company plans to spend €1.1 billion in the 2019 and in the 2020 fiscal years — more than the €800 million planned for customer solutions and the €1.7 million planned for energy networks in 2019 and €1.8 million in 2020.
Innogy
Innogy, meanwhile, stated that it had been hit by "low wind levels across large areas of Europe" last year.
Its renewables portfolio produced 9.6TWh in 2018, down 5.9% from the previous year.
Its adjusted Ebit for renewables was also down on 2017, 15% to €299 million.
Chief financial officer Bernhard Günther described 2018 as "not a good year for renewables", but added that Innogy had "laid the foundations for future growth".
It was for the 325MW Kaskasi wind farm off the coast of Germany and completed the 242MW and grew its portfolio of wind and solar projects by 200MW, Innogy stated.
It now operates renewables facilities with a total capacity of about 3.6GW.
The company also sold a 41% share in the 860MW Triton Knoll wind farm .
Innogy expects a noticeable increase in earnings — to between €400 and €500 million — from renewables for 2019 due to "normalised" weather conditions, it stated.
Weather
E.on and Innogy are not the only wind farm operators to report a decline in output in 2018.
EnBW and Boralex, too, both cited lower wind yields as a driving factor in reduced earnings from their respective renewables portfolios.
However, some developers — Ørsted and Vattenfall, for example — reported only a "minor impact" in 2018.
One analysis had suggested that available wind resources dropped by as much as 20% below long-term averages during summer 2018.
Asset swap
E.on stated that all aspects of its planned takeover of Innogy are "on schedule" despite a European Commission (EC) probe into whether the deal may reduce competition in retail markets.
It had filed the transaction with the EC in January — the first official step in formalising the various merger procedures between the two companies.
Under the deal, E.on will receive an 86.2% stake in Innogy, while RWE will acquire a 16.67% "effective participation" in E.on.
Innogy owner RWE will receive the renewable assets and gas storage business of its subsidiary and E.on, while E.on will only buy Innogy’s grid and retail business.
The RWE’s acquisition of E.on’s electricity generation assets in February.
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