E.ON lifts 2016 forecasts after securing discounts from Gazprom

German power supplier E.ON said Tuesday it has upgraded its profit forecasts for the current year after securing better gas prices from Russian supplier Gazprom.

"Negotiations between Uniper, the fully-owned E.ON subsidiary, and Gazprom to adjust the prices of long-term gas supply contracts have led to an agreement earlier than anticipated," the German group said in a statement.

The deal would enable E.ON to release some of the provisions it had set aside in previous years, boosting underlying, or operating, profit by "about 380 million euros" in the first quarter of 2016, E.ON said.

That, in turn, meant that full-year operating profit was now expected to come out in a range of 6.4-6.9 billion euros ($7.2-7.7 billion), instead of 6.0-6.5 billion euros projected previously, the statement said.

"Similarly, instead of underlying net income of 1.2-1.6 billion euros, E.ON now expects the range to be between 1.5-1.9 billion euros," it added.

"Gazprom and Uniper have again demonstrated that long-term gas supply contracts are amenable to flexible solutions," said the head of E.ON's Uniper subsidiary, Klaus Schaefer.

"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," Schaefer said.