Innogy raises capex as decision nears on 860 MW UK offshore project
Innogy, the renewable-energy business spun off by RWE, will increase capital spending in 2018 by more than a quarter to €3bn ($3.5bn) after warning that 2017 adjusted EBITDA and EBIT will be lower than previously expected. The 860 MW Triton Knoll offshore wind project in the UK, for which the final investment decision is expected in mid-2018, will be a major capex target, Innogy said. It plans to increase spending on e-mobility, renewable energy and broadband, it said.

Innogy SE (ETR:IGY) will step up capital spending in 2018, the German energy company said today as it warned that 2017 adjusted EBITDA and EBIT will be lower than previously expected.

The company plans a capex budget of more than EUR 3 billion (USD 3.5bn) for 2018, an increase of over 25% from this year's expected level, as it intends to invest more in future-oriented business areas like e-mobility, renewable energy and broadband. The 860-MW Triton Knoll offshore wind project in the UK, final investment decision on which is expected in mid-2018, will be a major capex target, Innogy said.

The company lowered its guidance for adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in 2017 to about EUR 4.3 billion from around EUR 4.4 billion. The adjusted EBIT estimate was also reduced to about EUR 2.8 billion from EUR 2.9 billion. Innogy said the main reason is difficult market environment in the UK retail business. There have also been higher costs for future-oriented projects such as digitisation and expenses for growth initiatives like e-mobility.

Adjusted net profit is still expected to exceed EUR 1.2 billion, but not much.

In 2018, the company expects adjusted EBIT of about EUR 2.7 billion. It said the renewables division will post earnings in line with 2017, thus an adjusted EBIT of about EUR 350 million.

"High growth ambitions initially come at a price, but pay off in the long run," chief executive Peter Terium said, adding that the company is at the same time making all its divisions fit for the digital future. "Even if this will weigh on our earnings short-term, I am convinced that this is the right strategy for setting up innogy optimally for the future – entirely in the interests of our shareholders, customers and employees," the CEO said.

(EUR 1 = USD 1.175)

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