German utility E.ON AG (EONGY.PK) lifted Tuesday its fiscal 2012 earnings forecast to reflect a 1 billion euros positive impact from its settlement with Russian gas pipeline systems operator OAO Gazprom (OGZPY.PK). E.ON shares increased around 4 percent in the morning trading on Frankfurt's Xetra.
E.ON said it has reached an agreement with Gazprom in the negotiations of their long-term gas supply contracts. The settlement includes an retroactive adaptation of pricing conditions for the price review period since the fourth quarter of 2010. The company expects to record the positive impact from the settlement in its half-year results.
For fiscal 2012, E.ON now expects EBITDA, a key earnings metric, between 10.4 billion euros and 11.0 billion euros, compared to previous forecast of between 9.6 billion euros and 10.2 billion euros.
Underlying net income is expected between 4.1 billion euros and 4.5 billion euros, higher than previous forecast of 2.3 billion euros to 2.7 billion euros.
The company noted that apart from the higher EBITDA, one-off effects on taxes and net interest expenses as well as a generally lower tax rate have a positive impact on group earnings.
In May, E.ON had backed its full-year forecast even after reporting a decline in first-quarter profit, citing lower prices in Europe power generation markets and shutdown of nuclear power stations in Germany.
E.ON then had confirmed its 2013 forecast, projecting EBITDA of 11.6 billion to 12.3 billion euros and underlying net income of 3.2 billion to 3.7 billion euros.
On Frankfurt's Xetra, E.ON shares are currently trading at 17.83 euros, up 0.61 euros or 3.54 percent.
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by RTT Staff Writer
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