Pulling the plug

8 May 2013 By Olaf Storbeck

After years of a declining share price, the German utility’s second largest shareholder has had enough. Statkraft, a Norwegian peer, sold its 4.2 percent stake in E.ON, realising a huge loss. Its willingness to take such pain highlights the bleak prospects for European utilities.

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State-owned Norwegian utility Statkraft has sold all its share of German peer E.ON, Statkraft announced on May 8. With a stake of 4.2 percent at the end of 2012, Statkraft used to be E.ON’s second largest shareholder. It sold 23.4 million shares in the first quarter and the remaining 60 million shares after the close of the quarter, receiving about 1.1 billion euros.
In November 2012, E.ON announced that its medium-term profit forecasts were too optimistic. In the first quarter of 2013, electricity sales at the German utility declined by 8 percent compared to the same quarter a year earlier. E.ON’s EBITDA shrank by 5 percent to 3.58 billion euros while the underlying net profit fell by 16 percent to 1.39 billion euros.

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