E.ON profit rise shows worst could be over

 
City A.M. Reporter
Cheaper gas supplies helped boost first-half profit at E.ON signalling the worst could be over for Germany's biggest power company whose earnings were ravaged last year by the government's decision to exit nuclear power.

E.ON said on today first-half earnings before interest, tax, depreciation and amortisation (Ebitda) would be around €6.7bn up from £5.3bn a year ago. It will publish full first-half results on 13 August.

In early July, E.ON reached a settlement with Russian state-run gas monopoly Gazprom on long-term gas supply contracts, effectively lowering the price it has to pay and providing a €1bn boost to half-year earnings.

Its operating earnings were hit last year by charges related to Germany's decision to abandon nuclear power by 2022.

"These effects will also continue to show in the quarters to come," E.ON said in an unscheduled statement.

Last year, Germany decided to shut 40 per cent of the country's nuclear capacity immediately, in the wake of Japan's Fukushima disaster, hitting utilities including E.ON, EnBW and RWE.

Other German utilities results have also showed the worst could be over. EnBW, Germany's third-largest utility, raised its outlook for the year late last month, benefiting from higher gas sales and network user charges.