31 August 2018, News Wires — Dutch energy company Eneco reported a sharp fall in first-half operating earnings on Friday, blaming costs related to its planned privatisation.
That privatisation, approved by its municipal shareholders in October, has been slowed by disputes that led to the dismissal of both its CEO and chairman, and an investigation into board decisions.
Eneco said that first-half operating profit fell to 115 million euros ($134 million) from 135 million euros in the same period a year ago.
Employee benefits expenses and costs of external consultants both rose sharply and were the main reason for the fall in operating profit.
Eneco forecast full-year earnings would be “substantially lower” because of ongoing investment costs and costs related to its planned privatisation.
“But these are mostly one-offs”, Chief Financial Officer Guido Dubbeld told reporters. “From next year on, we will benefit from our recent takeovers.”
Those acquisitions, such as a large stake in German renewable energy supplier Lichtblick and the Belgian activities of Italy’s Eni, drove up first-half revenue by 31 percent to 2.1 billion euros.
Gross margin – the difference between its revenue and its cost of purchasing and producing energy – dipped to 526 million euros from 528 million euros.
Before the company’s recent results and dispute over its privatisation, analysts had valued the business at about 3 billion euros. Major oil companies including Shell and utilities around Europe have expressed interest in Eneco because of its relatively large exposure to renewable assets.