Eon profits fall as Germany switches to more renewables

Eon, Germany’s largest utility, said first-half profit fell 21 per cent on lower wholesale power prices.

Underlying net income decreased to €1.17 billion ($1.3 billion) from €1.48 billion a year earlier, the Dusseldorf- based company said in a statement on Wednesday.

That beat the €1.15 billion average of seven estimates. Germany’s unprecedented shift to renewable energy has forced Eon and its peers to close nuclear reactors and undermined power prices, hurting the profitability of traditional utilities.

Eon plans to spin off its fossil-fuel plants into a separate company called Uniper, headed by former chief financial officer Klaus Schaefer.

Today's figures "reflect the difficult situation of conventional power plants", chief executive Johannes Teyssen said in the statement.

German year-ahead wholesale power prices averaged €32.04 in the first half and were 9.2 per cent below last year’s level, according to broker data.

Eon reported unadjusted net income of €1.32 billion. Sales rose 4.6 per cent to €57.3 billion from a year earlier. The company reiterated its 2015 forecast for underlying net income of €1.4 billion to €1.8 billion.

In the three months through June, underlying net income decreased 46 per cent on sales of €26.8 billion.

Both numbers were calculated by subtracting first-quarter earnings from the published half-year results. Smaller competitor RWE is scheduled to report first-half results on Thursday.