Utility RWE profits fall by half

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Profit at the German utility RWE, owner of Npower, fell 48.5% in the first three months of 2008.

Net profit came in at 809m euros ($1.25bn; £644m), down from 1.6bn euros in the same period of 2007.

The fall was due to changes in pricing regulation in Germany, a write-down at RWE's American Water unit and the weakening euro against the UK pound.

RWE declined to comment on whether it had made an offer for the UK's nuclear power firm British Energy.

RWE was one of the companies understood to be interested in bidding for the company, but there is no sign so far that it has done so.

Revealing its earnings, RWE said the charge for American Water related to its initial public offering on the New York Stock Exchange last month, which did not fare as well as had been expected.

At the same time, the strong euro against the pound is a problem for RWE because it means the earnings of its British businesses are worth less.

The drop in earnings was also caused by regulatory pricing changes.

RWE said the regulator had cut the amount it was allowed to charge other firms for using its grid system, and imposed stricter conditions underlying the emissions trading system.

RWE is Europe's largest emitter of carbon dioxide.