By Christoph Steitz
FRANKFURT (Reuters) – E.ON, Europe’s largest operator of energy networks, on Wednesday posted a 15% drop in first-quarter core profit, blaming higher energy prices that it was unable to pass on to customers right away.
Shares in the company fell to their lowest level in more than a year following the results, which exposed losses at the group’s Swedish and eastern European grid divisions as well as the higher cost of procuring energy.
Russia’s invasion of Ukraine has triggered an increase in energy costs due to uncertainty over whether Moscow will keep sending gas to Europe despite mounting international sanctions.
E.ON said its first-quarter adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 2.1 billion euros ($2.21 billion). The company, Germany’s largest energy firm, cited a “difficult market environment and high energy prices”.
The group said these effects would be temporary and it would be able to recoup the related losses later.
A Frankfurt-based trader said first-quarter numbers came in as “bad as feared”. Analysts at Stifel Research called them a “shy set” of results.
E.ON, a shareholder in the Nord Stream 1 pipeline that brings Russian gas to Germany, also kept its outlook for 2022 and confirmed investment plans of 5.3 billion euros this year.
“Ending Europe’s dependence on Russian energy imports will require a substantial acceleration of the energy transition. E.ON’s investment program will make a decisive contribution,” Chief Financial Officer Marc Spieker said.
($1 = 0.9483 euros)
(Reporting by Christoph Steitz, Editing by Rachel More, Kirsti Knolle and Bradley Perrett)
