Update: E.ON says it cannot rule out further price increases this year

E.ON today announced its trading results for 2012

E.ON today announced its trading results for 2012 - Credit: NewsCast

ENERGY giant E.ON today reported a dip in annual retail earnings in the UK after a year in which it kept its prices on hold.

But the German-owned group, which was the last of the UK’s “Big Six” energy supplies to lift its tariffs in the last round of price increases, having delayed its rise until January, warned that it could not rule out further increases before the end of 2013.

E.ON, whose UK retail arm includes the former Eastern Group business, reported a profit before tax and depreciation of £235million from its UK residential and business supply activities, down from £285m in 2011.

The company cut its electricity prices by an average of 6% in February 2012 and then, in May, issued a “price promise” not to increase its tariffs for the rest of the year.

Besides the impact of the price promise, the fall in earnings – which came despite an increase in turnover from £6.96billion to £7.63bn – also partly reflected an increase in investment, from £48m to £64m.

Tony Cocker, chief executive of E.ON UK, said that, alongside the price freeze, the company had focused on measures to improve service standards and this had resulted in E.ON being named by uSwitch, for the first time, as its overall winner for customer service.

However, when questioned on the outlook for prices, he told BBC Radio 4’s Today programme that “we can’t guarantee we won’t have to raise prices again this year”.

Most Read

E.ON’s other UK businesses, including electricity generation and gas storage and exploration, saw earnings fall from £1.02bn to £591m, on turnover down from £2.62bn to £2.55bn.

E.ON’s group-wide earnings for 2012 totalled 10.8billion euros (about £9.4bn), an increase of nearly 14% which E.ON said chiefly reflected a “significant improvement” in the gas wholesale business and the adverse impact on the previous year’s figures on Germany’s accelerated phase-out of nuclear energy.