Energy giant E.ON reports record loss as profits in UK fall
- Credit: NewsCast
Energy giant E.ON today revealed a 9% drop in UK profits after cutting gas prices and coming under pressure amid competition from rivals.
The German-owned group, one of the UK’s “Big Six” energy providers, said underlying earnings in the UK supply business fell to £267million last year from £294m in 2014.
It blamed the fall on its move in January 2015 to cut gas prices by 3.5%, as well as “keen competition in the marketplace”, which impacted its corporate and small business supply business.
E.ON also recently reduced its standard gas price by an average of 5.1% from February 1 amid the latest round of tariff cuts in the industry, although the major suppliers have been criticised by consumer groups over the size and pace of reductions, which have lagged behind steep falls in wholesale energy costs.
Tony Cocker, E.ON UK chief executive, said the company had continued to lead the way among the UK’s large suppliers in terms of customer satisfaction last year, adding that “in 2015 we invested more than £71m in our supply business alone for the benefit of our customers”.
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E.ON said generation profits in the UK rose to £490m, from £406m in 2014, thanks in part to its new Humber Gateway Offshore Wind Farm, which is now fully operational.
But the wider group posted another year of record losses, which more than doubled to seven billion euros (£5.4bn) from 3.16bn euros (£2.4bn) in 2014 as it suffered mammoth writedowns on its power stations and was hit by low wholesale electricity prices.
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E.ON’s UK operation includes the retail business of the former Eastern Electricity company which was acquired as part of TXU Energi in 2002 by Powergen, as E.ON’s UK subsidiary was then known.
E.ON withdrew from the former Eastern Electricity offices at Wherstead, near Ipswich, in 2008 with the loss of about 300 jobs, with the site subsequently being purchased by the East of England Co-operative Society.
However, although E.ON no longer has any physical presence in the region, any former Eastern customers who have never taken the opportunity to switch supplier will still be receiving electricity from E.ON by default.