E.ON posts higher profit as energy networks offset weak retail

E.ON SE reported a 12% increase in second-quarter net profit, driven by gains in its energy network division that offset weaker performance in retail operations.

The German utility said net profit rose to €1.1 billion from €980 million a year earlier, beating analyst expectations of €1.05 billion. Revenue increased 5% to €20.4 billion, supported by investments in regulated grid assets and higher tariffs.

The company’s energy networks unit, which operates electricity and gas grids in Germany, reported earnings before interest and taxes (EBIT) of €680 million, up 15% year-on-year. Regulated returns on grid investments and cost efficiencies contributed to the growth.

In contrast, E.ON’s retail segment, which supplies electricity and gas to households and businesses, saw EBIT decline by 8% to €320 million. The division faced margin compression due to lower wholesale energy prices and competitive pricing pressures in the German retail market.

E.ON maintained its full-year guidance, reaffirming a net profit target of €4.2 billion to €4.5 billion, citing continued support from network operations and a gradual recovery in retail margins.

Analysts at Jefferies noted that the results reflected the structural resilience of E.ON’s regulated assets, while retail performance remained sensitive to volatile energy markets. The company’s shares were up 2% in early trading on the Frankfurt exchange, though they lagged the broader utilities sector.

E.ON’s earnings report follows a trend among European utilities, where regulated network businesses have provided stable cash flows amid fluctuating retail energy prices.