E.ON Group internal operating profit up 52 percent in first-half 2001 Earnings turnaround at core energy business
In the first six months of 2001, the E.ON Group's internal operating profit climbed 52 percent to 1,964 million euros compared with 1,294 million euros in the year-earlier period. This sharp increase primarily results from successful portfolio-slimming measures at E.ON's Telecommunications Division. In addition, VEBA Oel, Viterra, Stinnes, and VAW posted markedly higher earnings.
E.ON's Energy Division achieved an earnings turnaround. In the first half of 2001, Energy's internal operating profit advanced 4 percent to 984 million euros against 949 million euros a year ago. This marks the first time since energy market liberalization that Energy's earnings have risen year-on-year. Efficiency-boosting measures, slightly firmer electricity prices, and higher sales volumes more than offset the costs related to Germany's Renewable Energy and Co-Generation Protection Laws as well as higher fuel costs. E.ON's new Sydkraft subsidiary also contributed to the earnings improvement.
Group net income after taxes and minority interests fell 74 percent to 832 million euros (1H00: 3,169 million euros), and earnings per share declined 72 percent to 1.22 euros (1H00: 4.35 euros). The year-earlier numbers included exceptionally high disposal gains from the sale of the Group's E-Plus and Cablecom interests.
For full-year 2001, E.ON continues to expect Group internal operating profit to markedly surpass the previous year's number, though not at the first-half's high rate of increase. E.ON continues to anticipate that the internal operating profit of its Energy Division will show a slight year-on-year improvement. The Chemicals Division is expected to post earnings on par with the prior year's figure. Overall, E.ON's other activities are expected to report a significantly higher internal operating profit. MEMC is forecasted to show a markedly greater operating loss owing to the dramatic deterioration of the market for silicon wafers. Moreover, E.ON expects to take considerable one-off charges resulting from its plans to exit this activity.