Weak demand for energy and slumping prices hurt utilities in Spain and Austria in the first half as the financial crisis dents power sales to key industrial customers and prevents companies from raising prices.
Spanish gas grid operator Enagas on Tuesday reported a 15 percent decline in gas demand across the country's network, with gas demand for the generation of electricity falling 22 percent, reflecting the steep fall in power consumption in Spain.
Verbund, Austria's biggest utility, reported a slight fall in first-half operating profit due to lower power prices and one-off effects. Some market participants expect that to last for the remainder of the year.
We disagree with hopes for a better second half curve, said Kepler Capital Markets analyst Ingo Becker in a note, referring to power prices in the remainder of the year.
The forward market is already pricing (in) the recovery hopes in the economy, he said.
Wholesale power prices in Spain and Portugal dropped 33 percent in the first half as demand declined 6.4 percent, according to Endesa, the Spanish unit of Italian utility giant Enel.
Verbund Chief Executive Wolfgang Anzengruber said he does not see spot prices recovering in the near future.
We believe electricity prices will stay stable at the current level, maybe with an upwards spike, but basically they will be stable, he told a news conference. He added that a rise would only come when the economy gets back on its feet.
Acciona's Spain-focused energy division confirmed the trend with the group reporting an 18 percent drop in first half operating profit, hit by falling wholesale energy prices.
All four companies underperformed the DJ Stoxx Utilities index , which up 0.76 percent at 1205 GMT. Verbund was was down 2.22 percent with Enagas, Enel and Endesa all flat. Acciona was down 3.0 percent.
Italian power grid operator Terna will release first half earnings later Tuesday. Its shares were flat.