EON Says First-Half Profit Triples on Gazprom Gas Settlement

EON AG (EOAN), Germany’s largest utility, said first-half profit more than tripled after a settlement with OAO Gazprom (GAZP) on supply contracts.

Underlying net income rose to 3.3 billion euros ($4.1 billion) from 900 million euros a year earlier, the Dusseldorf- based company said today in a statement. EON also confirmed its outlook for 2012 profit of 4.1 billion to 4.5 billion euros.

“The goals are easy to reach,” Daniel Seidenspinner, an analyst at B. Metzler Seel Sohn & Co. KGaA, said today by phone from Frankfurt. About 73 percent of the underlying net income forecast for the full year has already been achieved, he said.

EON gained as much as 3 percent, the highest since April 3, and rose 0.7 percent to 17.73 euros by 11:22 a.m. in Frankfurt.

EON and Gazprom agreed to amend long-term supply deals last month after the utility lost hundreds of millions of euros on contracts linked to oil prices. The accord was backdated to the fourth quarter of 2010 and added about 1 billion euros to EON’s half-year results, the utility said in a July 3 statement.

The company today also confirmed an increase in its full- year outlook for earnings before interest, taxes, depreciation and amortization, initially announced after the settlement, by 800 million euros to 10.4 billion to 11 billion euros.

Ebitda rose 56 percent to about 6.7 billion euros in the first half, “slightly” exceeding Seidenspinner’s estimate.

EON also attributed its first-half results to one-time effects linked to Germany’s decision to phase out nuclear power.

To contact the reporter on this story: Tino Andresen in Dusseldorf at tandresen1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.