Germany's EON profits down, 2011 outlook gloomy

9th March 2011, Comments 0 comments

Germany's biggest power company EON said Wednesday that its 2010 net profit fell 30 percent to 5.85 billion euros ($8.13 billion) and issued a downbeat outlook for this year.

EON said the poor result was due in part to a comparison with exceptional 2009 results that were boosted by major asset sales.

Net profit adjusted for exceptional items, which EON uses for forecasts and dividend payments, declined by a more modest 4.0 percent to 4.9 billion euros, it said in a statement.

Net profit was forecast to fall further this year to 3.3-4.0 billion euros, EON said, owing to a new German tax on nuclear fuel and weaker returns on sales of electricity and gas owing largely to previously-agreed prices.

The tax, which was levied in exchange for an extension to the operating life of German nuclear plants, will cut EON's earnings "by just under one billion euros in 2011," the statement said.

Sales in 2010 gained 16 percent to 92.9 billion euros, it added.

EON plans to pay a dividend of 1.50 euros for the 2010 exercise but promised only "at least 1.30 euros" pour share this year.

Core earnings before interest, taxes, depreciation and amortization (EBITDA) were forecast to regain the 2010 level of around 13 billion euros only in 2013.

The group said it had sold nine billion euros worth of assets to date, the latest being its British electricity network to US group PPL for 4.7 billion euros.

EON plans to divest assets worth 15 billion euros in all as it turns its focus to emerging economies.

Shares in the group showed a loss of 1.0 percent to 22.88 euros in morning trading on the Frankfurt stock exchange, while the DAX index of German blue chips was 0.19 percent higher overall.

© 2011 AFP

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