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PREVIEW-E.ON seen flagging lower profit, dividend as demand ebbs
January 29, 2013 / 1:57 PM / 5 years ago

PREVIEW-E.ON seen flagging lower profit, dividend as demand ebbs

* To publish 2013 outlook, prelim 2012 results on Jan. 30

* StarMine sees 2013 EBITDA at 9.7 billion euros

* Old outlook was for 11.6-12.3 billion euros

FRANKFURT, Jan 29 (Reuters) - E.ON, Germany’s largest utility, is expected to flag a fall in profits and dividends this year, joining peers suffering from weak European energy demand and low power prices.

E.ON shares recorded their biggest-ever intraday drop in November when the company pulled the plug on its previous 2013 forecasts, citing lower demand for electricity in Europe’s struggling economy.

On Wednesday, the company is scheduled to release a new outlook for this year as well as preliminary results for 2012, which are expected to reflect weakness in Europe, still E.ON’s most important market.

“We expect E.ON to confirm weak earnings prospects at tomorrow’s capital market day in London,” Commerzbank analyst Tanja Markloff said.

“The ongoing weakening of wholesale power prices and spreads over the last two months provides scope for further cuts to our medium-term earnings forecasts,” she added.

According to research firm StarMine, which gives more weight to historically accurate analysts, E.ON’s 2013 earnings before interest, tax, depreciation and amortisation (EBITDA) are seen at 9.7 billion euros ($13.1 billion), with underlying net income of 2.6 billion euros and a dividend of 0.75 euros per share.

The group’s previous 2013 forecasts were for EBITDA of 11.6-12.3 billion euros, underlying net income of 3.2-3.7 billion and a dividend of at least 1.10 euros per share.

Utilities across Europe are suffering. Sector leader GDF Suez warned on profits in December.

E.ON - along with smaller German rivals RWE and EnBW - has also been dealt a massive blow by Germany’s decision to pull out of nuclear power by 2022.

According to StarMine, E.ON’s 2012 EBITDA is seen at 10.7 billion euros, up 15 percent, and within its target range of 10.4-11.0 billion.

E.ON is due to publish full 2012 results on March 13.

$1 = 0.7429 euros Reporting by Christoph Steitz; Editing by Mark Potter

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