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E.ON earnings up

13 May 2004 – In the first quarter of 2004, the E.ON Group increased sales 7 per cent year-on-year to €14,622m (prior year: €13,713), primarily due to the inclusion of Ruhrgas and Graninge for the entire period.

Adjusted EBIT1 rose 21 per cent to €2,345m (€1,931m). Consolidated net income of €1,455m was 48 per cent above the prior-year figure of €986m, which had reflected substantial charges due to changes in accounting principles.

All market units record increases in adjusted EBIT

The Central Europe market unit’s adjusted EBIT of €1,179m was up 9 per cent from the prior-year figure of €1,082m, primarily due to higher earnings at the unit’s electricity operations. Consolidation effects were behind the 25 per cent increase in the Pan-& European Gas market unit’s adjusted EBIT of €416m (€332m). Adjusted EBIT at the U.K. market unit rose by 38 per cent to €270m (€196m), mainly due to the first-time consolidation of Midlands Electricity and to better margins in the electricity business. At the Nordic market unit, operating improvements in power and heat generation and retailing along with the first-time consolidation of Graninge led to an 82 per cent increase in adjusted EBIT of €279m ($332m) (€153m). The U.S. market unit’s adjusted EBIT of €93m was distinctly higher than the first quarter 2003 figure of €63m, which had been adversely affected by an ice storm and power plant outage.

Improved outlook for core business

For the current year, E.ON expects to exceed the record adjusted EBIT posted in 2003. However, it anticipates that full-year results will show a lower rate of increase than in the first quarter, which benefited considerably from consolidation effects. E.ON now expects its core energy business to achieve double-digit growth in adjusted EBIT.

E.ON does not expect consolidated net income for 2004 to reach the prior-year level due to the absence of comparable book gains.

E.ON CEO Wulf Bernotat commented: “Our solid start in 2004 strengthens our expectation that full-year adjusted EBIT will again surpass the record number we posted in 2003. Our improved earnings outlook for our core business demonstrates once again that we’re well on our way to achieving our ambitious financial targets.”