Profit before considerations has increased by 13% in the second quarter for German utility giant E.ON. However, high wholesale costs have resulted in a reduced profit for the firm's UK division.
Duesseldorf-headquartered E.ON has reported a 13% increase in EBIT profit to E4.8 billion for the first half of the financial year. Sales increased by 31% year on year to E36.9 billion.
Net profit actually fell back by 29% to E2.8 billion, however E.ON said this was due to one off factors that unusually boosted H1 2005 profit figures and costs associated with domestic regulatory restructuring activities.
Despite this, the company’s central Europe market unit increased adjusted EBIT by 5% to E2.45 billion, while its pan-European gas market unit grew adjusted EBIT by 82% to E1.46 billion.
However E.ON’s UK operation, which is branded Powergen, suffered a 26% drop in profits to E451 million as a result of added administrative costs and higher wholesale prices. According to the power giant, Q1 was particularly poor, while Q2 showed improvement after Powergen increased end-user tariffs. More UK price rises could be on the cards.
E.ON believes that it will meet its target of exceeding 2005 levels for earnings before considerations in its full year results, but the company admitted it would likely report a slight fall in net profit.