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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
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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.