By Christoph Steitz and Tom Käckenhoff
FRANKFURT (Reuters) -E.ON expects a severe hit to fourth-quarter profits at its retail division, Europe's largest operator of energy networks said on Wednesday, a direct result of price cuts in the wake of falling gas procurement costs.
E.ON, like many other European utilities, had to pay significantly more to procure gas in 2022 after an effective halt of Russian gas supplies led prices to soar, a market trend that has since been reversed.
"In recent months, we have implemented price reductions for millions of our electricity and gas customers," E.ON finance chief Marc Spieker said.
"We expect the passthrough of lower wholesale prices and other effects to have a significant negative impact on our earnings in the Customer Solutions business in the fourth quarter."
Shares in the company were indicated to open 1.3% lower in pre-market trade, with traders pointing to the cautious tone on fourth-quarter results.
The company kept its outlook for the full year, expecting adjusted core profit (EBITDA) of between 8.6 billion euros and 8.8 billion euros ($9.2 billion to $9.40 billion) and an adjusted net profit of between 2.7 billion and 2.9 billion euros.
It raised its 2023 investment target by 0.3 billion euros to 6.1 billion and posted a 27% increase in nine-month core profit to 7.8 billion euros.
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