Eon ‘increasingly likely’ to raise prices after supply business loss

Eon is “increasingly likely” to put up energy bills for its customers after its supply business posted a £37 million loss, according to chief executive Tony Cocker.

Speaking as Eon released its interim financial results for the third quarter (Q3) of 2013, Cocker said increasing costs mean Eon is “being put in a position where it is increasingly likely that we will need to pass on some of these increase in costs to our consumers”.

He added that “this is always a last resort” and that Eon “will also seek to minimise any increase”.

The loss in the supply business was attributed to the network costs and the cost of government schemes.

Cocker also called for the Carbon Floor Price to be scrapped because it is “simply a tax that artificially inflates the end price for the consumer.

He added: “If it is not scrapped, the money it raises should be used for energy efficiency.

“This is why we support the Energy Bill Revolution, which is calling for the Carbon Floor Price revenues to be reinvested to improve the energy efficiency in UK homes.”

The results showed Eon’s turnover “increased significantly” to £5,876 million, from £5,441 million in Q3 in 2012.

The company also recorded a profit (EBITDA) of £236 million,  a “very small increase” of £4 million from the same period last year.

On the generation side of the business, turnover fell from £1,764 million in Q3 2012, to £1,404 million for the same period this year, while EBITDA almost halved from £457 million to £242 million. Investment also fell from £799 million to £461 million.

Cocker said: “The lower EBITDA for Eon’s other activities in the UK for the year so far is attributable to a number of factors including the closure of Kingsnorth power station under the Large Combustion Plant Directive and the fact that gas power stations remain barely profitable.”