The German energy group Eon closed the first quarter with a profit on the rise, benefiting from the renegotiation of the supply contract with Gazprom: the net result amounted to 1,31 billion euros, up 30% compared to 1,09 billion in the same period last year. Ebitda also increased, +8% to 3,07 billion. Eon explains that without the renegotiation of the contract with Gazprom the profit would have been slightly down. In fact, the German group continues to suffer from the depression of wholesale electricity prices in Europe, which penalize in particular its traditional production, from gas to coal and nuclear.
“Gross operating margin – specifies the E.On press release – grew from €2,8 billion to €3,1 billion. Underlying net profit also increased by €300 million to €1,3 billion. This improvement in profitability is attributable to a one-time positive effect due to the agreement with Gazprom to adjust the terms of long-term gas supply contracts. Without this effect, E.ON's profitability would have been slightly lower than in the first quarter of last year."
“Our results for the first quarter indicate that some of our traditional business remains under pressure. This lends even greater significance to the fact that E.ON's transformation since the beginning of the year is proceeding according to plan. We presented the strategies and financial plans for E.ON and Uniper to the market in London at the end of April. The route we have taken has met with great appreciation. During the Shareholders' Meeting on 8 June we want to convince our shareholders that the planned separation will give E.ON and Uniper better prospects for the future than our previous set-up. I am very confident that we will be successful, paving the way for Uniper's flotation in the second half of the year,” said Michael Sen, CFO of E.ON.
“The detachment in our market and the need to provide Uniper with a solid financial organization will leave their mark on E.ON's financial statements” continued Sen “2016 is a year of transition and marks a new beginning. In the medium term, we will focus on our core businesses, namely energy networks, customer solutions and renewable energies. These stable sources of income, solid financial structure, thoughtful resource allocation, resolute customer focus and superior performance in all business segments will lay the foundations for our positioning in the new energy world."
Profitability in the first quarter of 2016, continues E.On's note, was higher mainly thanks to the Global Commodities segment following the agreement signed by Uniper and Gazprom on the new terms for long-term gas supply contracts. This component alone generated revenues of approximately €400 million. E.ON also achieved operational improvements in the gas sales business. Together, these effects allowed the Global Commodities segment to increase its revenues by a total of €600 million. E.ON's newly commissioned assets, the Amrumbank West and Humber Gateway offshore wind farms and Maasvlakte Power Station Unit 3, also had a positive effect on revenues.
These positive factors were partially offset by the lower prices on the market, the closure of plants, the sale of the E&P business in the Norwegian North Sea and the divestment of generation capacity in Spain and Italy and the interruption of the activity of a plant and the consequent contraction of revenues in Russia.
