FRANKFURT (Reuters) - E.ON (EONGn.DE), Germany’s No.1 utility, lowered the upper end of its full-year profit target range after plunging power prices and a boom in renewable energy caused nine-month profit to decline by a fifth.
The group said on Wednesday it now saw earnings before interest, tax, depreciation and amortisation (EBITDA) reaching 9.2-9.3 billion euros ($12.4-12.5 billion) compared with a previous outlook range of 9.2-9.8 billion.
This is roughly in line with the 9.3 billion euros average forecast in a Reuters poll of analysts.
“Some aspects of our business environment are beyond our ability to influence. In particular our legacy generation business continues to suffer from the upheavals in the power market,” Chief Executive Johannes Teyssen wrote in a letter to shareholders.
Already battered by Germany’s decision to abandon nuclear energy by 2022, the country’s utilities also face a massive expansion of renewable energy as well as free-falling wholesale power prices, pushing their conventional plants into the red.
German wholesale power prices have more than halved since peaking in 2008, hit by economic weakness in Europe, which has led to tepid energy demand.
E.ON said its nine-month EBITDA declined by 19 percent to 7.117 billion euros, below the 7.179 billion average forecast in a Reuters poll.
Since the nuclear exit was decided in 2011, E.ON’s shares have lost 43 percent of their value, compared with a 7 percent drop in Europe’s benchmark utility index .SX6P during the same period.
Reporting by Christoph Steitz; Editing by Maria Sheahan, John Stonestreet