East Anglia: First-half profits more than treble at energy giant E.ON
ENERGY giant E.ON more than trebled its profits during the first half of 2012, it emerged today, prompting fresh questions over whether UK consumers are benefiting from falling wholesale prices for gas and electricity.
German-based E.ON, one of the UK’s “Big Six” energy suppliers, reported underlying net income for the January to June period of 3.3billion euros (�2.6bn) compared with around 900million euros (�706m) at last year’s half-way stage.
E.ON’s results come shortly after British Gas came under pressure to drop its prices after revealing a 23% jump in profits in the six months to June 30.
The comparison was flattered by a big hit taken by the company last year relating to Germany’s phasing out of nuclear energy, but watchdog group Consumer Focus said the scale of growth would “reopen questions” over whether falling wholesale prices are being passed on.
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.
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“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,” he added.
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E.ON said it was sticking to its forecast for 2012, with net profits expected to come in at between 4.1bn euros and 4.5bn euros (�3.2bn to �3.5bn).
Chief executive Johannes Teyssen said: “Our solid first-half results demonstrate that we’re meeting our existing challenges decisively.”
E.ON has around five million customers in the UK, where it previously operated as Powergen. It retains a relatively high concentration of customers in the East of England as it includes the retail business of former regional supplier Eastern Electricity as a result of its successive takeovers by Hanson, TXU and Powergen following privatisation.
In May, E.ON reassured its customers by pledging to keep residential energy prices on hold this year. Its promise came after British Gas owner Centrica signalled that further price increases were on the way as its costs continued to mount.