Energy giant fuels ‘fair price’ controversy as profits treble

E.ON, which has more than five million customers in the UK, reported underlying net income for the January to June period of £2.6bn compared to £706m a year earlier.

While the figures were flattered by a big hit taken by the company last year relating to Germany’s phasing out of nuclear energy, Consumer Focus said the haul would “reopen questions” over whether falling wholesale prices are being passed on.

The results come shortly after British Gas came under pressure to drop its prices after revealing a 23 per cent rise in profits in the six months to June 30.

Richard Hall, Head of Energy Regulation at Consumer Focus, said: “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.”

The profit surge was helped by a gas price settlement with the giant Russian gas producer Gazprom.

E.ON said it was sticking to its forecast for 2012, with net profits at £3.2bn to £3.5bn.

Chief executive Johannes Teyssen said: “Our solid first-half results demonstrate that we’re meeting our existing challenges decisively.”

The German utility giant said first-half sales rose by 23 per cent year on year to £51.4bn.

Mr Hall added “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 pledged to keep residential energy prices on hold this year.