E.ON has reported net profit of EUR1.8 billion for the third quarter of 2009 compared to EUR1 billion in the same period last year. However, revenues for the quarter declined 13% to EUR16.74 billion compared to EUR19.25 billion in the prior year quarter.
E.ON has reported adjusted net income of EUR4.5 billion, which was roughly on par with the prior year figure. The nine-month adjusted EBIT was EUR7.7 billion, down EUR45m, even though the company’s power and gas businesses continued to experience slight declines in sales volume.
Without the currency-translation effects that reduced E.ON’s earnings from the UK and Sweden in euros, E.ON’s adjusted EBIT actually would have surpassed the prior year figure, demonstrating that E.ON has further improved its operating business.
E.ON’s sales declined by 2% to EUR59.3 billion. The key factors were lower gas sales volume and lower sales prices for oil and gas at the Pan-European Gas market unit, negative currency-translation effects, and lower nuclear and hydro production at the Nordic market unit.
The Central Europe market unit’s adjusted EBIT rose by about 1% to EUR3.7 billion. The adverse impact of the economic crisis, outages at nuclear power stations, the absence of earnings resulting from the sale of generation capacity, and a narrowing of retail electricity margins were more than offset by the addition of operations in France and Romania, higher network charges, and efficiency enhancements.
By contrast, Pan-European Gas’s adjusted EBIT fell by 33% to EUR1.4 billion. The main factors were a recession-driven decline in sales volume along with lower transport charges and narrower margins in the gas-trading business.
At EUR375m, the UK market unit’s adjusted EBIT was also down significantly. This was predominantly due to the transfer of activities to the Energy Trading market unit; other factors were sterling’s weakness against the euro and narrower margins in power generation.
Nordic’s adjusted EBIT declined to EUR403m due to planned outages at nuclear power stations, lower power production and sales volumes resulting from the sale of generation capacity to Statkraft, and the weak Swedish kroner.
The US Midwest market unit increased adjusted EBIT by 4% to EUR318m, benefiting from favorable currency-translation effects and wider margins in its regulated retail business.
The Energy Trading market unit posted a particularly significant earnings increase, contributing EUR803m in adjusted EBIT. Of this, the biggest share, EUR703m came from the optimisation business, particularly from the marketing of E.ON’s power production. Together, the operations in E.ON’s New Markets segment (Russia, Italy, Spain, and Climate & Renewables) delivered EUR732m in adjusted EBIT.
E.ON expects its full-year 2009 adjusted EBIT to match the prior year level and now expects the decline in full-year adjusted net income to be around 3 to 5%. E.ON’s previous forecast was for a decline of 5 to 10%.