E.ON sees profits slump despite energy price hikes

E.ON said its UK retail business, which supplies electricity and gas to 4.8m homes in the UK, saw underlying earnings fall 7.6 per cent to £304m in 2011.

The lower profits came despite E.ON hiking its electricity bills by 11.4 per cent and gas prices by 18.1 per cent in September. The group announced a six per cent cut to electricity bills in February, but this falls outside the reporting period.

The German firm reported a group loss of 1.9bn euros (£1.6bn) in 2011, compared to a 6.3bn euro (£5.3bn) profit the previous year, after the German government shut down several nuclear power plants. However, sales were up by 22 per cent from 93bn euros (£77.9bn) to 113bn euros (£94.7bn) and expects a profit for 2012 of up to 2.7bn euros (£2.3bn).