E.ON energy giant urged to cut bills as UK profits rise by 30%

| August 14, 2012 | 0 Comments

By
Sean Poulter

08:43 EST, 13 August 2012


|

18:34 EST, 13 August 2012

Energy company E.on saw its profits soar by almost a quarter in the first half of the year as high prices fuelled a crippling cost of living squeeze for millions.

The German firm cashed in by increasing its profit margin on the gas and  electricity it sells to more than four million UK customers.

E.on is one of the country’s ‘big six’ power suppliers which all stand accused of failing to pass on the full benefit of falls in wholesale prices.

Upbeat: E.ON UK arm saw profits rise 30 per cent, while profits at E.ON German parent more than tripled in the first half of the year

Upbeat: E.ON UK arm saw profits rise 30 per cent, while profits at E.ON German parent more than tripled in the first half of the year

The average annual dual fuel bill for E.on is £1,261, £200 more than it was in January last year and some 55 per cent higher than the £813 customers paid in early 2008.

Apart from the financial pain inflicted on customers, the high energy bills are also harming British industry and efforts to escape the recession.

Profits at E.on’s UK operation rose by 23.7 per cent, up by £47million to £245million for the first six months of the year. Using another measure of profits – the figure for earnings before interest and tax – the total rose by 47 per cent to £199million.

The UK profits boosted those of E.on’s German parent company, where the total for the first half of the year trebled to £2.45billion.

E.on is not alone in cashing in on consumers. Recently the UK’s biggest supplier, British Gas, revealed profits rose almost 23 per cent in the first half of the year to reach £345million.

The bonanza at E.on is particularly surprising as it came in a year when the company sold off a highly profitable arm, Central Networks, which runs the electricity cable networks in many parts of the country.

Heating up: The Bank of England last week warned that household energy bills could go up by the end of the year

Heating up: The Bank of England last week warned that household energy bills could go up by the end of the year

Richard Hall, head of energy regulation at the official customer body Consumer Focus, said: ‘E.on’s profits have jumped by 24 per cent despite it selling off its profitable network businesses last year.

‘Such a big increase, hard on the heels of British Gas profit rises, will leave customers questioning whether the price they’re paying is fair.

‘Wholesale prices are now a long way from their peak and E.on has reported greater margins based on changes in their costs

‘This will reopen questions on whether falls in wholesale pricing are fed through fairly and fully.

‘Profitable companies are needed for our economy but customers need to know they are being charged a fair price through a competitive and transparent market.’

E.on has promised not to raise its standard energy tariff this year, however, industry analysts insist all the major firms have scope to cut prices.

Ann Robinson, the director of consumer policy at uSwitch.com, said: ‘E.on has frozen its prices for the winter, but I would now urge it to go one step further and to cut its prices ahead of winter so that customers can feel some of the benefit of the lower wholesale costs too.

‘With over eight in ten households having cut down or rationed their energy use last winter because of cost, any reduction would be welcomed.’

E.on and other suppliers did make small price cuts earlier this year, but this was not enough to wipe out earlier rises.

Yesterday E.on confirmed its profits in the UK had been boosted ‘primarily because of improved retail margins’.

The company’s finances have benefited from the fact it has signed a long-term low-price supply deal with the Russian gas producer Gazprom.

It is also abandoning nuclear power following concerns triggered by Japan’s Fukushima reactor meltdown in March last year.

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“Energy company E.on saw its profits soar by almost a quarter in the first half of the year as high prices fuelled a crippling cost of living squeeze for millions. The German firm cashed in by increasing its profit margin on the gas and electricity it sells to more than four million UK customers.”
Britons are the ‘cash cows’ of Europe when it comes to utility services of gas, electricity, water and telecommunications. But wait, who flogged off the utility companies?

Well you Tories privatised the utilities so don’t grumble when they rip you off.
Isn’t profit the basis of capitalism ?

And to think we actually did beat them in two world wars and still they seem to be ruling us.

I’m an E.on customer and if I could do without their service I would give it up tomorrow.

French “milking ” the British as usual.
– grumpy old, brillainr britain, 14/08/2012 00:01
It’s a German company, not French.

French “milking ” the British as usual.

British Gas are just as bad but are now telling people with Boiler Maintenance Agreements that they wont honour the agreements if the boiler is 10 years old.
Not if they don’t have the parts but if the Boiler is over 10 years old.
I can go on the Net and see parts, cost and availability but British Gas can not.

Yet another company whose priority is greed.

We have an ineffective regulator who pampers to the whims of the big 6. We have 6 large companies who fix prices between themselves and its us the customers who pick up the tab. On top of that we pay a lot of our energy on wasteful solar panels that will never pay its way on top of many idle wind farms. Many of us now have to make a choice of food or heating come Winter, but fear not I am sure the government dont care many ill/elderly will die if we get a severe winter like in 2010

E on are also making staff redundant. Lowest of the low

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