OGZPY PJSC Gazprom (PK)

   By Monica Houston-Waesch 
 

FRANKFURT--German power utility E.ON SE (EOAN.XE) said it reached agreement with Russia's Gazprom on price adjustments for long-term gas contracts which would improve the German company's earnings outlook for the year.

The deal resolves pending arbitration between the two companies and frees up provisions set aside in prior years, E.ON said in a statement.

E.ON now sees earnings before interest, taxes, depreciation and amortization, or Ebitda, of between 6.4 billion euros to 6.9 billion euros ($7.15 billion to $7.71 billion), above its previous forecast of EUR6.0 billion to EUR6.5 billion.

Likewise, the company's outlook for adjusted after-tax profit was revised higher to between EUR1.5 billion and EUR1.9 billion, above its former forecast of EUR1.2 billion to EUR1.6 billion.

On March 9, E.ON said once shareholders approve the spin-off of Uniper, a separate company formed this year containing most of the company's conventional power generation assets, the company would revise its outlook accordingly.

"Even in a difficult market environment characterized by significant declines in energy prices, our partnership has proved itself again. Long-term gas supply contracts will remain a mainstay of a stable supply of heat and electricity for Europe," Uniper Chief Executive Klaus Schaefer said.

Write to Monica Houston-Waesch at monica.houston-waesch@wsj.com

(END) Dow Jones Newswires

March 29, 2016 10:45 ET (14:45 GMT)

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