In the generation and upstream businesses, earnings before interest, tax, depreciation and amortisation plummeted by 42 per cent year-on-year to £591 million in 2012. It was hit by the sale of a stake in Corby power station in 2011 and lower production from North Sea wells.
Retail fared slightly better, with Ebitda dropping 18 per cent to £235 million. That was attributed to the absence of income from the regulated Central Networks, sold in April 2011, lower business sales volumes and higher costs form regulatory obligations. Customer numbers stayed fairly flat and the domestic retail profit margin increased slightly to 2.3 per cent, or £27 on the typical dual fuel bill.
Eon UK chief executive Tony Cocker said the company had worked hard to make sure it made the right choices for customers. “We still have a long way to go in terms of how we’d like our customers to view us,” he said, but “I’m heartened by the progress we’ve made by doing things differently.”
As UK results dipped, Eon group Ebitda rose 16 per cent to €10.8 billion. Expansion into Russia, renewables and oil exploration reportedly went some way to offset declining energy demand and low power prices. The company has also entered Turkish and Brazilian markets.
Chief executive Johannes Teyssen said “these solid results are gratifying” but admitted the company’s stock performance had been “unsatisfactory” in 2012.
“The anticipated earnings shortfalls resulting from market changes and dislocations won’t be offset overnight,” he said. “Our goal is still to rank among the best companies in our industry. You can be sure that we’re doing everything we can to put our company back on course for success.”