German power giant RWE - which owns UK company npower - has seen its profits rise more than five per cent on the back of higher electricity prices.
Its first half operating profit rose to £2.376 billion, up 5.3 per cent from £2.256 billion a year earlier, as it benefited from higher charges in its key German and UK markets.
The operating result was also at the high end of the £2.260 billion to £2.419 billion range analysts forecast.
Chief executive Harry Roels said: "The main driver was the energy business in Continental Europe, which enabled us to more than compensate for significantly reduced earnings from the UK energy business."
Germany's largest electricity supplier also saw first half net profit rise to £984 million, up from £934 million.
Higher power prices were the key earnings driver for RWE, which also has sizeable gas and water supply operations.
According to analysts, forward electricity prices on the EEX energy and emissions exchange in mid-July were up 30 per cent over the past 12 months.
In addition, rising coal prices do not impact RWE as much as many of its rivals since the Essen-based utility operates its own lignite mines in Germany.
Lars Korinth, an analyst at HVB said: "The numbers were good, but contained no positive surprises. The firm confirmed the outlook. It looks as if some investors had expected more."
RWE's first half sales declined to £14.269 billion from £14.534 billion on deconsolidation effects.
RWE also said its net debt is likely to be below last year's £8.5 billion level by the end of December.
The group also reaffirmed its full-year outlook, saying it expects operating profit to grow by a single digit amount, excluding deconsolidation and currency effects.
RWE also sees its full year net profit up by a single digit percentage point amount.
The utility said it plans to increase 2005 capital expenditure on property, plant and equipment to about £2.75 billion.