European utility E.ON sees plunge in revenues as natural gas and power sales drop amid business overhauls
European utility E.ON whose main businesses in terms of volume span nations like Germany, the UK, the Netherlands and Eastern Europe reported a 33 percent plunge in first-quarter revenues, though swung to a quarterly net profit in the first three months of the year from a previous loss as the business was overhauled.
E.ON’s sales from January through March 2024 decline to €22.64 billion ($24.45Bln) from €33.54Bln in the first quarter of 2023.
Net profits at Essen, Germany-based E.ON came to €838 million compared with a loss of €72M in the first three months of 2023.
Earnings per share moved into positive territory at €0.22 per share from losses of €0.03 per share in the prior-year period.
Natural gas sales
Sales of natural gas to consumers declined to 63.4 billion kilowatt hours from 76.2Bln kWh in the first quarter of 2023.
E.ON’s first-quarter electricity sales dropped to 35.4 billion kilowatt hours from 40.9Bln kWh in the first three months of 2023.
E.ON has overhauled its business segments and the changes started in January 2024 whereby there are now three divisions, Energy Retail combining Energy Networks and Customer Solutions, while the Energy Infrastructure Solutions (EIS) is now a separate division that was carved out of Customer Solutions.
In addition, a number of regional markets at the Energy Networks division were reassigned.
This means that East-Central Europe and Turkey is now divided into East-Central Europe, including the Czech Republic, Slovakia and Poland and South Eastern Europe, taking in Hungary, Croatia, Romania and the E.ON stake in Enerjisa Enerji in Turkey.
Furthermore, the E.ON Group’s central commodity procurement unit, E.ON Energy Markets GmbH, is now part of Energy Retail from January 2024 after previously being part of Corporate Functions.
Bond sales
The German company listed among its highlights some successful bond sales of €3.3Bln and an arbitration proceedings against Spain.
The E.ON group, E.ON Financial and E.ON Iberia Holdings are plaintiffs in arbitration proceedings in which the three E.ON entities are asserting claims for damages for changes to Spain’s remuneration scheme for renewable energy.
“The E.ON Group’s sales in the first quarter of 2024 declined and in Germany this development is attributable in particular to the discontinuation of government subsidies for transmission network tariffs, which led to an increase in network tariffs in the first quarter of 2024,” the company explained.
“Higher sales in Sweden resulted from an increase in wheeling volume along with adjusted network tariffs due to improved regulatory parameters,” the company added.
In the power industry, wheeling is the delivery of energy from a generator to an end-user located in another area through the use of an existing distribution or transmission network.
“A decline in sales in South Eastern Europe is mainly attributable to a reduction in network tariffs that reflect lower procurement costs for network losses due to reduced electricity prices,” said E.ON.
The E.ON Group’s cash-effective investments of €1.28Bln in the first quarter of 2024 were 24 percent above the prior-year figure of €1.04Bln. The spending was on property, plants and equipment.
Customer data
The Germany company’s Energy Retail business has 47 million customers with the top three power markets being Germany 14M customers and 25 percent of sales,
the Netherlands with 4M customers and 24 percent of sales and the UK with 9M customers and 18 percent of sales.
E.ON also published energy statistics for key markets for 2023 compared with 2022.
German retail gas sales in 2023 amounted to 187.5 terawatt hours versus 179.2 TWh in the 2022, while UK gas sales were 66.3 TWh in 2023, down from 152.9 TWh in the 2022 as business structures also changed.
Natural gas sales in the Netherlands increased to 85.2 TWh from 74.5 TWh in the previous year.
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