EON SE, Germany’s biggest utility, reported a 16 percent drop in profit in the first quarter because of divestments, lower output and narrower margins in power generation from fossil fuels.
Underlying net income, the profit measure EON uses to calculate its dividend, fell to 1.39 billion euros ($1.82 billion) from 1.66 billion euros a year earlier, the Dusseldorf- based company said today in a statement. That beat the 1.3 billion euro average estimate of seven analysts compiled by Bloomberg. Sales gained 0.4 percent to 35.9 billion euros.
European utilities are contending with weaker demand and a slower economic outlook ahead of Germany’s planned exit from nuclear energy by 2022. EON, which scrapped previous profit forecasts for 2013, plans to reduce capital spending and is selling assets to cut costs. The utility, which is focusing on expansion abroad, is also studying whether to close unprofitable power plants at home.
EON confirmed its outlook of an underlying net income of 2.2 billion euros to 2.6 billion euros for this year.
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