E.ON lowers 2013 profit forecast

http://www.guardian.co.uk/business/2012/nov/13/eon-lowers-profit-forecast

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The power company E.ON has lowered its profit outlook for next year, citing economic weakness and structural changes in the energy sector following the decision to phase out nuclear power in Germany.

The Düsseldorf-based company, which has 5 million UK customers, reported a €179m (£143m) loss for the third quarter, compared with a profit of €173m a year earlier. Although E.ON's pretax profit rose 64% to €6.1bn for the first nine months, it warned it may have to close plants and step up austerity measures. "One factor is that the demand for electricity remains very low," its chief executive, Johannes Teyssen, said on Tuesday, adding that it was likely to miss its underlying net income target of €3.2bn-€3.7bn in 2013.

According to the International Energy Agency (IEA), energy demand in the EU is expected to decline by 2% between 2010 and 2015, compared with a 10% rise globally. E.ON shares fell almost 10%, and rival RWE lost more than 4%.

E.ON depends on units such as its UK business, which are struggling with recession-hit home markets. To cut its huge debt the German market leader sold its Central Networks division in Britain, which provides electricity to 5m homes in the Midlands, in a £3.5bn deal to US power company Pennsylvania Power and Light in April 2011.