The ‘big six’ firm said that underlying net income dropped by 42% to €1.9 billion (£1.6 billion) between April and June. Sales fell by 3% during this time as Europe’s financial crisis impacted on demand for power, with consumers switching off whenever possible.
‘No recovery in sight’
E.ON, which is a German company, said that record-low wholesale power prices as well as renewable energy initiatives would continue to impact on its profits, warning that “no recovery is in sight”.
In addition, Germany’s decision to abandon nuclear power by 2022 has impacted on the country’s utilities, causing thousands of job losses in the sector, as well as the cutting of tens of billions worth of assets.
The energy supplier said that the falling profits were still in line with its projections for the quarter, and its current forecast for the full year, which stands at between €2.2 billion and €2.6 billion.
Numbers ‘not great’
A Frankfurt-based trader commented: “The numbers per se are not great but they beat expectations, and that’s all that matters.”
E.ON commented that its continuing restructuring programme had helped to deliver some cost savings, but these had been counterbalanced by the lack in earnings of divisions it has sold off. These include E.ON Thuringer Energie and E.ON Westfalen Weser.
In the UK E.ON noted that it had benefited from the late onset of summer, with people continuing to switch their heating on later into the year than usual. What’s more, the company’s dual-fuel customers endured a price rise of 8.7% in January.