German power giant RWE said Tuesday its net profit dropped 28 percent in 2012 and it expects earnings to decline "significantly" in coming years due to changes in the European energy market.
RWE said in a statement its bottom-line net profit fell by 27.7 percent to 1.306 billion euros ($1.7 billion) last year.
By contrast, underlying or operating profit increased by 10.4 percent to 6.416 billion euros on a 3.0-percent rise in revenues to 53.227 billion euros.
Electricity sales were down 5.7 percent at 227.8 billion kilowatt hours (kWh) and gas sales declined by 4.8 percent to 306.8 billion kWh.
"Despite difficult market conditions, RWE had a good financial year in 2012," said chief executive Peter Terium.
"One of the contributing factors to the improvement in the result was the absence of the exceptional burdens experienced in 2011 following the decision to phase out nuclear energy in Germany. In 2012, those burdens were much lighter," Terium said.
"We also benefited from strong earnings contributions from our efficiency programme and successful trading activities," he added.
Looking ahead, RWE said it expected operating result "in the order of 5.9 billion euros" this year on revenues of around 54 billion euros.
Beyond 2013, "RWE expects its operating result to decline significantly in view of the structural changes in the European energy market and their effects on our earnings prospects. We are a company that has to work hard for its future," said chief executive Terium.