German power group EON posts weaker Q1 profit

11th May 2011, Comments 0 comments

The biggest German energy company, EON, reported Wednesday a net profit of 2.267 billion euros ($3.26 billion) in the first quarter, a slight decline of 0.48 percent on the year.

EON also trimmed its full-year targets amid questions about the future of nuclear energy in Germany following the disaster in Japan.

First-quarter sales gained eight percent from the same period a year earlier to 27.846 billion euros, a statement said.

For 2011 as a whole however, the power company now expects an adjusted operating profit of between 10.7 and 11.4 billion euros, and an adjusted net profit before exceptional items of between 3.0 and 3.7 billion euros.

The new forecasts are roughly 500 million euros lower than those given by EON at the start of the year, before the catastrophe at the Fukushima plant led to an abrupt about-face on nuclear power by German Chancellor Angela Merkel.

The latest outlook is also a result of EON's sale of its electric power network in Britain.

Merkel has decided to abandon a plan to extend the working life of 17 German nuclear reactors and ordered that the oldest be shut down next month.

EON owns six reactors, two of which will be affected by the shut-down, but noted that its new targets are based on the assumption that its nuclear plants remain active.

Officials in Berlin are to publish on June 6 a timeframe for the country's gradual withdrawal from the use of nuclear power.

In the first three months of the year, EON's adjusted operating profit fell by an annualised 23 percent to 3.47 billion euros, and net profit excluding exceptional items shed 34 percent to 1.315 billion.

The results were slightly lower than those forecast by analysts polled by Dow Jones Newswires.

EON pointed to losses in gas operations, weaker results in Britain and southern Europe and smaller profits from its German electric distribution networks.

But the group stressed that it was able to offset to a large extent the 250 million euros in costs stemming from the shutdown of two reactors.

© 2011 AFP

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