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E.On reports sharp fall in profits E.On reports sharp fall in profits
(about 2 hours later)
German energy firm E.On has reported a sharp fall in profits in 2010 and forecast another tough year in 2011.German energy firm E.On has reported a sharp fall in profits in 2010 and forecast another tough year in 2011.
Net profit came in at 6.28bn euros ($8.7bn; £5.4bn), down 28% on the 8.67bn euros the company made in 2009, largely due to one-off writedowns. Revenue rose by 16% to 92.9bn euros.Net profit came in at 6.28bn euros ($8.7bn; £5.4bn), down 28% on the 8.67bn euros the company made in 2009, largely due to one-off writedowns. Revenue rose by 16% to 92.9bn euros.
The firm said improvements in UK retail sales had helped support core profits.The firm said improvements in UK retail sales had helped support core profits.
But it warned that Germany's new nuclear fuel tax would hit profits in 2011 by almost 1bn euros.But it warned that Germany's new nuclear fuel tax would hit profits in 2011 by almost 1bn euros.
The company also said profits would suffer from the impact of supply contracts that had locked in lower gas prices during the downturn.The company also said profits would suffer from the impact of supply contracts that had locked in lower gas prices during the downturn.
As a result profits would fall below 2010 levels, it said, and these factors would also affect profits in 2012 "to a lesser degree".As a result profits would fall below 2010 levels, it said, and these factors would also affect profits in 2012 "to a lesser degree".
The company is currently selling assets to raise 15bn euros. Since November, it has raised 9bn euros, it said, by selling its stake in Gazprom, gas networks in Italy and its power networks business in the UK.The company is currently selling assets to raise 15bn euros. Since November, it has raised 9bn euros, it said, by selling its stake in Gazprom, gas networks in Italy and its power networks business in the UK.
E.On still has a range of operations in the UK, including the Kingsnorth power station and Ratcliffe-on-Soar Power Station. E.On is the UK's third-largest energy supplier in terms of customer numbers. It has 8m customer accounts and supplies 5 million households.
The company says it made a pre-tax profit in the UK of £763m last year, up 32% from the £579m earned in 2009.
It says this was largely down to increased energy use at the start of the year, and that overall margins in its retail business were less than 5%.
E.On still has a range of power generation operations in the UK, including the Kingsnorth power station and Ratcliffe-on-Soar Power Station.
In the UK it also operates windfarms and nuclear power stations, and sells gas and electricity to businesses and households.In the UK it also operates windfarms and nuclear power stations, and sells gas and electricity to businesses and households.