E.ON’s half-year profits triple due to deal with Gazprom

AFP Photo / Patrik Stollarz
Germany’s largest utility E.ON said its first-half profit more than tripled reaching $3.9 billion after it reached a gas price deal with Russia’s Gazprom, and thanks to the absence of charges linked to Germany's exit from nuclear power.

­E.ON released key earnings figures last week, stressing the impact of a deal with its main gas supplier Gazprom to reduce prices under long-term contracts.

"Following our long-term agreement with Gazprom and those already reached with other suppliers, our gas business is no longer a strategic work in progress," Chief Executive Johannes Teyssen said in a letter to shareholders.

E.ON receives gas from six countries, a quarter of it from Russia, and is Gazprom's biggest European customer.
Its earnings in Russia grew 39 percent to 0.4 billion euros, due to an increase in installed generating capacity.

E.ON said payments from the agreement with Gazprom will take place not earlier than the third quarter.

E.ON put the positive effect of the Gazprom deal at 1.2 billion euros in the first half of 2012.

At the same time E.ON has warned that there has been a considerably less demand for energy in Europe due to it weakening economy. The company said it would be taking steps to reduce costs, like "closing assets where necessary".

In Germany E.ON is considering working with government agencies to keep non-economic generators in service as reserve capacity.