Pushing EU Energy Market
March 7, 2007
"We need to take bolder steps towards a European energy market," E.ON chief executive officer Wulf Bernotat said at his company's annual press conference in Düsseldorf.
Bernotat said he had proposed a European core market in the energy sector, linking Austria, France, Germany, Switzerland and the Benelux countries -- the Netherlands, Belgium and Luxembourg.
Bernotat said E.ON would be holding discussions on the plan with the EU Commission, calling it more favorable than an EU proposal to separate electricity and natural gas suppliers from their networks.
Double-digit growth sparked by higher prices
Higher prices paid by consumers for electricity and natural gas helped E.ON achieve double-digit growth in 2006, with sales up 21 percent from 2005 to 67.8 billion euros ($88.8 billion), the company said.
E.ON said adjusted net income rose 20 percent to 4.4 billion euros, but the unadjusted figure was down 32 percent at 5.1 billion euros in comparison to last year, when the sale of property concern Viterra and Ruhrgas Industries boosted E.ON's earnings.
The company said the good results meant it would increase the dividend for shareholders by 60 euro cents to 3.35 euros. E.ON share prices were up 1.39 percent at 98.06 euros after the news.
It also said five regional E.ON suppliers would lower prices for consumers by up to 8.4 percent in May or June; two had already done so this month.
Push for Endesa
Bernotat said his company was still pressing ahead with its 41-billion-euros takeover bid for Spain's top electricity supplier Endesa, despite a threat from Italian rival Enel which has acquired a 22 percent stake in the Spanish company.
On Tuesday, E.ON dropped a demand that Endesa's shareholders change company regulations to ease the takeover, a move that analysts said may result in Enel and other large Endesa investors being unable to form a voting majority.
Bernotat said a takeover by E.ON would accelerate moves towards a fusion of the European energy market, which is currently operated on a regional basis.
Enel's acquisition of a 22-percent stake in Endesa has turned it into the company's main shareholder. Others include the Spanish builder Acciona, which holds 21.3 per cent, and Sepi with 2.9 percent.
The German group said it would seek to establish contact with Enel to discuss its intentions with regard to Endesa.
Bernotat has not ruled out that E.ON might content itself with a minority stake.
European Commission involvement
The European Commission earlier blocked attempts by Madrid to impose strict conditions on E.ON in a bid to keep Endesa in Spanish hands.
Endesa shareholders had been scheduled to vote on the proposal at an extraordinary general meeting on March 20. But the Spanish firm has called off the meeting in the wake of E.ON's latest announcement.
Meanwhile, European Union regulators stepped up their threat of legal action against Spain on Wednesday, formally requesting Madrid to withdraw key conditions on E.On bid to buy Endesa.
The European Commission said it asked Spain to reply by March 16 or face a possible legal battle at the EU's high court in Luxembourg.