E.ON CEO: energy crisis has eased, not ended

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) -E.ON, Europe’s biggest operator of energy networks, on Wednesday said the continent’s energy crisis continued and its customers must maintain efforts to reduce consumption, although the situation had improved.

“The crisis is not over yet,” CEO Leonhard Birnbaum told journalists after presenting final results for the first half.

“We must continue to work on the issue of austerity. This is the best way to ensure affordability for customers and also to achieve competitiveness of our society and our economy.”

Birnbaum said that high gas storage levels were reason to be optimistic Europe would cope with the upcoming heating season, but well-filled caverns could not alone prevent price swings.

Shares in the company, which last month reported preliminary results and a higher outlook for 2023, fell by as much as 3.5% to their lowest level since March 20.

Traders linked the price fall to a 5% quarterly increase in the group’s net debt to 37 billion euros ($41 billion) at end-June, partly a consequence of higher investments that rose by more than a third to 2.4 billion euros during the first six months.

Birnbaum said the biggest improvement in the market situation was an easing in energy prices compared with record power and gas prices in Europe last year after Russia cut gas deliveries to Germany.

He said that E.ON would pass on lower power and gas costs to millions of its customers, which will weigh on company profits in the second half of the year.

E.ON, which intends to invest 33 billion euros in the 2023-2027 period, confirmed its outlook for the current year of adjusted core profit (EBITDA) of 8.6 billion to 8.8 billion euros.

($1 = 0.9113 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Additional reporting by Vera Eckert, Danilo Masoni and Zuzanna Szymanska; Editing by Friederike Heine and Barbara Lewis)