German E.ON presses Berlin on nuclear power

11th August 2010, Comments 0 comments

German power giant E.ON posted mixed quarterly results on Wednesday and pressed Chancellor Angela Merkel to live up to her promise to extend the life of some of the country's nuclear plants.

"There has long been a lack of clarity about the direction of Germany's energy-policy," chief executive Johannes Teyssen said. "This needs to change."

Teyssen said German authorities needed to make "an environmentally and economically sensible decision on the future of nuclear energy in this country."

Germany decided under previous centre-left chancellor Gerhard Schroeder to close all nuclear plants by around 2020. The conservative Merkel stuck to this decision in her first term.

But her new-look coalition, in place since elections in September, has said it would extend the life of some of the reactors. She has not yet acted officially however, to the frustration of German power companies.

Their share prices have been weighed down by the uncertainty, with E.ON stock losing around 20 percent of its value since the beginning of the year.

On Wednesday, the shares fell by 0.65 percent to 23.29 euros in morning trading, while the Dax index of leading German stocks was 1.13 percent lower overall.

E.ON also fired a warning shot across Merkel's plans to impose a nuclear tax, saying in a note to analysts this would shave 1.3-1.5 billion euros off its annual operating profit and threatening to cut back on investments.

The tax "might lead to a reduction in investments in order to maintain the group's health," it said.

E.ON also released better than expected second quarter operating results, though net profit fell by 9.0 percent to 1.7 billion euros (2.2 billion dollars) owing to tax effects and higher interest payments, the statement said.

Adjusted net profit, the figure focused on by analysts, slipped 1.0 percent to 3.3 billion euros, in line with an average analyst forecast compiled by Dow Jones Newswires.

On the operating level, E.ON reported better adjusted core earnings before interest and tax (Ebit) in the first half of the year of 6.1 billion euros, a gain of 11 percent from the first six months of 2009.

Market forecasts had pencilled in a more modest figure of 5.83 billion euros.

First half sales gained 6.7 percent to 44.3 billion euros, slightly lower than expected.

The power giant confirmed its full-year targets meanwhile, an increase of up to 3.0 percent in adjusted Ebit, and stable adjusted net profit.

© 2010 AFP

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