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Business

Utility giant E.ON suffers profit slump on sluggish markets

German gas, electricity and water utility company E.ON has announced its net profit has fallen significantly in the second quarter. The firm has continued to struggle with weak demand across crisis-hit Europe.

Germany's largest power supplier said August 13 its second-quarter net income was 919 million euros ($1.22 billion), down from 1.18 billion euros in the April-June period a year ago. The figures marked a 22 percent fall in net profit.

First-half earnings before interest, tax, depreciation and amortization dropped by 15 percent from the same period last year to 5.7 billion euros, the Düsseldorf-based company announced.

"In particular, E.ON's power generation business in Europe is suffering from low-capacity utilization and low wholesale prices as a result of the continent's economic crisis and interventionist energy policies and regulations," the utility firm said in a statement.

Adapting to a changing market

E.ON added that cost savings through a restructuring program and higher earnings in the renewable and exploration divisions had a positive impact on income, but were more than offset by the absence of profit from divested companies and the negative effects of the current market situation in fossil-fueled power generation.

Despite the problems at hand, CEO Johannes Teufer reaffirmed the company's full-year earnings forecast.

He said it expected 2013 profit before interest and tax to come in at 9.2 billion to 9.8 billion euros. E.ON did not mention any possible one-off effects later in the year.

hg/dr (dpa, AP)