E.ON posts stable earnings despite drop in sales

E.ON has posted an adjusted EBITDA of €13.5bn for fiscal 2009, about 1 per cent up compared to last year. The sales for the year were down by 6 per cent to €82bn compared to €87bn in the previous year.

The decline in sales was primarily due to the lower prices in the gas wholesale business and lower gas sales volume at Pan-European Gas, currency-translation effects at UK and Nordic, and lower generation from nuclear and hydro assets at Nordic.

For the year, adjusted EBIT was €9.6bn, down 2.3 per cent compared to the year ago. The adjusted net income declined by 4.8 per cent.

After high investments in 2007 and 2008, E.ON deliberately reduced its investments in 2009 to €9.2bn.

Central Europe's adjusted EBIT rose by €97m to €4.8bn in 2009. The positive factors included efficiency-enhancement measures, a regulation-driven increase in network charges, and the inclusion for the entire year of operations in France acquired in 2008, the company said.

The adjusted EBIT at Pan European Gas was down by 33 per cent, while UK's adjusted EBIT was down by about 30 per cent to €649m, predominantly due to the transfer of gas contracts to Energy Trading and to lower market-based transfer prices.

US Midwest's adjusted EBIT of €384m was slightly below in 2009 than the prior-year level, due to lower sales volumes and lower wholesale prices. Nordic's adjusted EBIT fell by 31 per cent to €535m in 2009. Alongside currency-translation effects, the main negative factor was lower sales volume from nuclear and hydro assets, according to E.ON.

New markets recorded an EBIT of €862m. The Italy and Spain market units posted particularly significant earnings increases, in part due to non-recurring effects. Russia and Climate & Renewables also made positive contributions to this segment's adjusted EBIT.

Energy Trading posted an adjusted EBIT of around €950m, in part through optimization in gas trading.

Despite the absence of roughly €1bn in earnings streams due to asset disposals, E.ON expects its 2010 adjusted EBIT to be 0 per cent to 3 per cent above the prior-year level and its 2010 adjusted net income to be in line with the prior year.