E.ON SE, Germany’s gas, electricity and water utility company, has seen first-half profits drop 15% despite a 15% surge in profits from its UK customers thanks to an 8.7% price rise this year.
Weak demand across Europe has seen the company’s second quarter net income drop to 919 million euros ($1.22 billion) from 1.18 billion euros in the second quarter of 2012.
The 15% drop in the company’s first-half earnings is before interest, tax, depreciation and amortization and represents a 22% fall in net profit, according to Germany’s Deutsche Welle.
"In particular, E.ON's power generation business in Europe is suffering from low-capacity utilization and low wholesale prices as a result of the continent's economic crisis and interventionist energy policies and regulations," the utility firm said in a statement.
At the same time, E.ON has reported a 15% surge in profits from its UK customers, after a March deep-freeze and late arrival of summer sent demand soaring.
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According to Bloomberg, sales dropped 1.2% to 64.6 billion euros in the first half of this year.
The market is changing, and E.ON is scrambling to adapt to lower demand and new market regulations intended to prop up renewable energy sectors such as wind and solar power.
While E.ON is expanding abroad and may shut down some of its plants in Germany, its other adaptive strategies include reducing capital spending and selling off assets.
By. Charles Kennedy of Oilprice.com