EON SE reported a 42 percent drop in first-half profit as lower power prices forced Germany’s biggest utility to keep plants idle.
Underlying net income, the measure EON uses to calculate its dividend, fell to 1.91 billion euros ($2.54 billion) from 3.3 billion euros a year earlier, the Dusseldorf-based company said today in a statement. That beat the 1.79 billion-euro average estimate of seven analysts surveyed by Bloomberg. Sales dropped 1.2 percent to 64.6 billion euros.
“EON’s power generation business in Europe is suffering from low capacity utilization and low wholesale prices as a result of Europe’s economic crisis and interventionist energy policies and regulations,” the company said in the statement.
German utilities are contending with lower demand, power prices near record lows and market rules that support wind and solar power. EON, which last year scrapped profit forecasts for 2013, today kept its revised target for underlying net income of 2.2 billion euros to 2.6 billion euros.
The company, expanding abroad as it considers plant shutdowns at home, plans to reduce capital spending and is selling assets to cut costs.
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