Europe feels a certain chill

Wednesday, 13 May 2009

Major utilities in Europe have weathered the economic storm, with meteorological conditions mitigating a general drop of about 6% in electricity use across Europe.

 

First quarter results have been released today by both Electricité de France (EdF) and German-based EOn. Domestic markets dominate, but both firms have substantial interests across Europe.

 

Potential difference Approximate drop in electricity consumption, first quarter 2008 to first quarter 2009
France  Germany  Italy  Nordic Region  Russia  Spain and Portugal  UK except Northern Ireland	1% 5% 7% 2% 7% 9% 6%
Approximate figures adjusted for temperature. WNA estimation from BDEW, EdF, EOn and IEA data.

EdF grew sales organically by 12.5% to €21.1 billion ($28.7 billion), while for EOn sales were up 14% to €25.9 billion ($35.2 billion). Besides economic slowdown, factors in play for both the firms included rapidly fluctuating exchange rates, changing prices and tariffs and an unusually cold winter this year.

 

EdF reported that its sales to industrial power customers in its main market, France, dropped by 3.5 billion kWh but this was more than mitigated by a surge in household sales of 4.2 billion kWh on temperatures 1.7 ºC below average. However, excluding the effect of low temperatures, consumption in homes dropped by 2.7 billion kWh. Earnings for this quarter were not revealed by EdF's statement, but it said that over the whole of 2009 it expected a 'moderate' increase in pre-tax profits in part due to the acquisition of British Energy.

 

For EOn earnings took a hit on the recession with earnings before tax 5% below those for this quarter in 2008. However, "Despite the uncertainty of its operating environment and assumptions, the company continues to expect its adjusted earnings before interest and tax to match the high prior-year figure."