OREANDA-NEWS. August 10, 2011. E.On Group reported its 1H11 IFRS financials today (10 Aug) which contain some headline numbers for its Russia segment which serve as a proxy for the performance of E.On Russia (formerly known as OGK-4). The results are strong overall: adjusted EBITDA rose 48% YoY in rouble terms with net income up 67% YoY, driven by 8.7% growth in electricity production. Our FY11 estimate for YoY EBITDA growth is 35%, while consensus expects a 41% rise.

Bottom line

We believe the results demonstrate E.On Russia’s ability to benefit from electricity market liberalisation and rising gas prices (due to its fuel-efficient assets), as well as the positive effect of new capacity additions. If the EBITDA growth trend seen in 1H11 continues throughout the year, the full-year figure should beat both our and consensus estimates. We consider the news to be positive for the share price performance of E.On Russia.