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German utility E.ON lowers 2013 outlook

Associated Press Modified: November 13, 2012 at 10:15 am •  Published: November 13, 2012

CEO Johannes Teyssen said E.ON faces "huge challenges," particularly in its electricity generation business, and added that the company is "exploring whether to close some assets."

He said in a letter to shareholders that one problem is that, as countries switch to more climate-friendly power supplies, gas-fired generators "have become barely profitable to operate." That's in part because overall electricity demand is very low, but also because energy from renewable sources is fed into grids as a priority when demand is higher, he added.

For the first nine months of the year, E.ON said its net earnings rose to €2.73 billion from the previous year's €864 million. Revenue increased to €93.63 billion from €77.51 billion.

For that period, E.ON credited an improvement in its wholesale gas business; the effect last year of costs stemming from Germany's decision to speed up its phaseout of nuclear energy; and new gas-fired generating units in Russia.

E.ON last year announced a plan to cut up to 11,000 jobs from a workforce of some 80,000.