Germany's E.ON and French GDF Suez, two leading European utilities, posted lower earnings as a prolonged energy crisis in Europe is leading to power plant closures and asset writedowns, Reuters reported on November 13.
Both companies said they would focus on investment in emerging markets to try and counter a stagnant western Europe, where economies are struggling to emerge from recession.
E.ON said its European electricity production fell 7 percent in the first nine months of the year and saw core profit fall by a fifth. The group trimmed its 2013 core earnings forecast to a range of 9.2 to 9.3 billion euros ($12.4-12.5 billion), from 9.2 to 9.8 billion.
GDF, Europe's second-largest by market value after French EDF, posted a 6.5 percent drop in nine-month core earnings and said it would write down European power assets but confirmed guidance for current earnings.
Falling demand and overcapacity have led to plunging wholesale power prices and have thrown Europe's utilities into an unprecedented crisis.
To make matters worse, abundant U.S. shale gas has led to Europe-bound exports of cheap U.S. coal, which makes gas-fired generators uneconomical and forces utilities to close down or mothball dozens of turbines.
E.ON has shut seven gigawatt (GW) of gas plant capacity - equivalent to seven nuclear plants - while GDF has closed down 12 GW, decided to close 2 GW in the third quarter and has put another 5 to 7 GW under review.
Copyright: Reuters, 2013