FRANKFURT (Reuters) - Germany’s E.ON (EONGn.DE), which is set to take over rival Innogy’s (IGY.DE) customer portfolio, added about 100,000 household clients in the first half while delivering a 10 percent rise in profits.
Adjusted operating profit (EBIT) rose to 1.9 billion euros (1.7 billion pounds), in line with forecasts from banks and brokerages in a Reuters poll.
“Our core business — Energy Networks, Customer Solutions, and Renewables — delivered good results, even though we continue to face fierce competition, primarily in our customer solutions business,” Chief Financial Officer Marc Spieker said.
Shares in the company were down 1.4 percent by 0930 GMT as some investors had hoped for an upgrade of the group’s outlook.
Spieker noted competition for residential and commercial electricity clients in Germany and a looming price cap for retail prices in Britain, where it is one of the ‘big six’ providers. Yet E.ON still added 100,000 household clients, taking its total above 20 million, Spieker said.
E.ON’s Customer Solutions business posted an 8 percent rise in adjusted EBIT to 477 million euros versus 474 million expected by analysts.
Competition for retail clients across Europe is forcing utilities to lower prices and offer bonuses to users switching providers.
“In the UK, E.ON has been the only large player with domestic customer gains over last 12 months ... and is now the second largest player in the B2C segment in the UK, which we see as encouraging,” analysts at Jefferies, who rate the stock a “buy”, wrote in a note.
In March E.ON announced plans to split up peer Innogy with rival RWE (RWEG.DE) and take on Innogy’s customer business. It secured a stake of 86.2 percent in Innogy as part of a takeover bid completed last month.
The deal will make E.ON one of Europe’s largest retail energy players with about 50 million customers.
Additional reporting by Hakan Ersen; Editing by Victoria Bryan and Jason Neely