Germany’s largest energy group Innogy says no need for strategic partner to grow
FRANKFURT: Innogy, Germany’s largest energy group, has no need of a strategic partner to help expand its business, its chief executive said on Friday, adding there was no prospect of a large deal involving the company.
Innogy, focused on networks, renewables and retail, was split from RWE last year in Germany’s largest stock market flotation since 2000, giving investors direct access to faster growing businesses as opposed to RWE’s legacy power plant and volatile energy trading operations.
Sources last month told Reuters European utilities are studying strategic options following a prolonged period of weakness triggered by the expansion of solar and wind capacity.
Yet Innogy chief Peter Terium said the group had no need to participate in such deals and Innogy’s management was focused on developing the group’s existing businesses.
“To do that, we in principle don’t need a strategic partner, we can do it on our own,” Terium said. He could not rule out finding a partner at some point, “but at the moment I do not see any interest.”
Terium also dismissed talk of big acquisitions and mergers more broadly across the European utility sector. Investment banking sources told Reuters in May for instance that RWE was studying a possible swap of its Innogy stake for a minority position in French group Engie.
NO BASIS
“There is more being written about it than there is substance to it,” Terium said. “Of course, there are numerous banks out there that want to advise because it is in their interest and because they want to cash in on fees. There is no commercial basis for any of this.”
Innogy hopes to play a key role in the expansion of electric car charging stations in Europe and the United States, where it set up a subsidiary in California last month in a bid to take on ChargePoint, the world’s biggest e-charging vendor.
In Europe, the group aims to be selected as the supplier of super-fast charging stations by a group of carmakers, facing stiff competition from companies like Siemens and German peer E.ON.
Innogy posted first-half adjusted earnings before interest and tax (EBIT) of 1.73 billion euros ($2 billion), in line with the average forecast in a Reuters poll of banks and brokerages. Its core network unit, where profits were up 19 percent, contributed nearly two thirds.
The company said its British retail business Npower added some 50,000 customers, or about 1 percent, in the second quarter, but still warned the unit would remain in the red this year after slipping to a first-half operating loss.
Npower is suffering from a mix of billing issues and rising competition, as well as government efforts to reduce long-term energy bills for households and businesses.
Shares in the group were down 0.8 percent at 1125 GMT. ($1 = 0.8508 euros)
Source: Reuters
