Utility Week

Utility Week 5th December 2014

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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UTILITY WEEK | 5Th - 11Th DEcEmbEr 2014 | 19 Finance & Investment Stock watch 15 14.5 14 eon share price, 27 november - 2 december 27 Nov 28 Nov 1 Dec 2 Dec 15 14.5 14 13.5 13 12.5 eon share price, 4 november - 2 december 4 Nov 11 Nov 18 Nov 25 Nov 2 Dec Eon shares jumped more than 4.5 per cent on 1 December to 14.93p following news that it will tackle Europe's changing energy landscape by separating its loss-making thermal generation operations from its more innovative customer-facing core. The move was welcomed by the market, with prices rising further as the trading day opened and remaining at similar levels into Tuesday. current pricing levels stand at highs not seen since July. This week Eon to split business in strategy overhaul New business to manage conventional power generation while Eon focuses on emerging trends German energy giant Eon is to create a new company to split its business operations between emerging energy market trends and the continued need for con- ventional security of supply. Eon will focus on emerging energy innovations (including renewables), distribution net- works and customer solutions; a new independent business, to be set up by 2016, will manage the group's conventional power generation, energy trading and upstream activities. Although Eon will maintain a minority share of the company initially, it intends to sell the shares in the medium term, it said. The need to address the "fundamentally differ- ent" aspects of Europe's energy future mean that two "separate, distinctly focused companies" offer the best prospects, said Eon chief executive, Johannes Teyssen. European utilities have come persistent pressure in recent years as the deployment of subsidised renewable technologies undermines the profitability of conven- tional thermal generation. Teyssen said: "We are convinced that it's necessary to respond to dramatically altered global energy markets, technical innovation and more diverse customer expec- tations with a bold new beginning." But he added that the transformation of the energy system will continue to require reliable backup capac- ity as well as access to global markets. "With a portfolio consisting of conventional power generation, global energy trading and exploration and production, the new company will focus on meeting these needs," he said. JA ENErgY GIB takes stake in offshore windfarm The Green Investment Bank (GIB) will take a 20 per cent stake in the Sheringham Shoal offshore windfarm for £240 million, it said last week. GIB will buy the stake in pro- ject owner Scira Offshore Energy from joint investors Statkra and Statoil before transferring the acquisition to its proposed Operating Offshore Wind Fund as a seed asset, it said. "This is an important invest- ment for the UK offshore wind sector in two respects," said GIB chief executive Shaun Kingsbury in a statement. "First, it allows two strategically important investors, Statkra and Statoil, to take part of their investment in an operating project and reinvest it in other projects. "Second, we intend, in time, to transfer the asset to our proposed Operating Offshore Wind Fund, which is intended to attract new investors and new capital to the UK," he said. WaTEr Anglian profits hold steady as costs rise Anglian Water has recorded steady half-year (H1) profits despite higher operating costs. The company's profit aer tax for the six months to 30 September 2014 is £77.1 million, fractionally down (£0.1 million) on the same period last year. The steady profit levels came despite an £11 million increase in operational costs (to £238.7 million), primarily due to general inflationary increases and costs associated with newly commissioned plants. This was partially offset by increased effi- ciency within the business. Turnover rose from £624.8 million in H1 2013 to £637.3 mil- lion. This was due to a 2.6 per cent inflationary price increase, but was curtailed by a reduction in demand. WaTEr Thames Water posts £100m fall in profits Thames Water recorded a fall in post-tax profits of £100 million due to a higher tax charge in its half-year results. The company made £133.6 million in the six months to 30 September 2014, down from £233.6 million in the same period the previous year. Thames paid £36.4 million in tax on its profit during this period, but this compares with a credit payment of £99.4 million from the Treasury last year as a result of a cut to the corpora- tion tax rate from 21 per cent to 20 per cent. Pre-tax profit rose from £134.2 million in H1 2013 to £170 million for the same period this year, while turnover grew by £43.3 million (4.4 per cent). EON: reorganisation is a "bold new beginning"

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