E.ON profits 'to raise questions'
Filed under: Utilities
E.ON, which has more than five million customers in the UK, reported underlying net income for the January to June period of 3.3 billion euro (£2.6 billion) compared with around 900 million euro (£706 million) a year earlier.
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The results come shortly after British Gas came under pressure to drop its prices after revealing a 23% hike in profits in the six months to June 30.
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Richard Hall, head of energy regulation at Consumer Focus, said: "Such a big increase, hard on the heels of British Gas profit rises, will leave customers questioning whether the price they're paying is fair."
The profit surge was also helped by a gas price settlement with Russia's Gazprom.
E.ON said it was sticking to its forecast for 2012, with net profits at 4.1 billion euro to 4.5 billion euro (£3.2 billion to £3.5 billion). The German utility giant said first-half sales rose by 23% year on year to 65.4 billion euro (£51.4 billion). The Generation division posted lower sales, owing mainly to the absence of output from nuclear power stations in Germany that were shut down in 2011.
E.ON's UK business is smaller than it was for the equivalent period in 2011, Consumer Focus said, after it sold its Central Networks distribution networks to Western Power Distribution on April 1 last year.
Mr Hall added: "Wholesale prices are now a long way from their peak and E.ON has reported greater margins based on changes in their costs. This will reopen questions on whether falls in wholesale pricing are fed through fairly and fully. Profitable companies are needed for our economy but customers need to know they are being charged a fair price through a competitive and transparent market."
E.ON in May reassured its customers after it pledged to keep residential energy prices on hold this year. E.ON's promise came after British Gas owner Centrica signalled that further price hikes were on the way as its costs continued to mount. The German utility giant confirmed that wholesale energy costs are expected to climb but said it will freeze prices for the rest of 2012 as part of a commitment to be fair and transparent.
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