Business

E.On profits hurt by financial crisis in Europe

In the UK E.On benefited from the late start to summer
Image caption In the UK, E.On benefited from the late start to summer

E.On, one of the UK's "big six" energy suppliers, has reported a fall in profits for the second quarter as the financial crisis in Europe hit demand for power.

The firm, Germany's largest power supplier, said underlying net income plunged by 42% to 1.9bn euros (£1.6bn) between April and June as sales slipped by 3%.

It said record-low wholesale power prices and a boom in alternative energy sources would continue to hurt profits.

"No recovery is in sight," it said.

However, the profits were in line with expectations and the firm maintained its current forecast for full year net income of between 2.2 and 2.6bn euros.

"The numbers per se are not great but they beat expectations, and that's all that matters," a Frankfurt-based trader said.

E.On said that its continuing restructuring programme had helped deliver some cost savings.

However, these were offset by the absence of earnings from divisions that it has sold, which include some of its German regional businesses, such as E.On Thuringer Energie and E.On Westfalen Weser.

In the UK, E.On benefited from the late start to summer. It said sales rose by 9%, thanks particularly to the low temperatures in March.

The firm raised prices for its dual-fuel customers in the UK by 8.7% in January.

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