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RWE takes 3.3-bn euro hit on 2013 earnings

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RWE, Germany's second-biggest power supplier, said on Tuesday it will make additional writedowns of 3.3 billion euros ($4.5 billion) on its 2013 earnings.

RWE said in a statement that it "has recognised an additional impairment of about 3.3 billion euros."

The writedowns included about 2.9 billion euros in the conventional power generation division and were due to "the significant deterioration in earnings in the continental European power plant sector."

On top of this, there was also a need for impairment in the renewables division and other shareholdings.

"The impairments will reduce the non-operating result and therefore also the net income for 2013," the statement.

However, they would not have an impact on underlying or operating profit, the group insisted.

"Throughout Europe, gas and hard coal-fired power stations in particular are under substantial economic pressure," said chief executive Peter Terium.

"By recognising this impairment, we are taking account of the fundamental changes in framework conditions on the European generation market in particular.

"However, we are already reacting to the difficulties in terms of earnings –- with which all European power producers are faced –- and are further reducing the costs of our power plant fleet with resolve, in order to increase our earning power," Terium said.

RWE, Germany’s second-biggest power supplier, said on Tuesday it will make additional writedowns of 3.3 billion euros ($4.5 billion) on its 2013 earnings.

RWE said in a statement that it “has recognised an additional impairment of about 3.3 billion euros.”

The writedowns included about 2.9 billion euros in the conventional power generation division and were due to “the significant deterioration in earnings in the continental European power plant sector.”

On top of this, there was also a need for impairment in the renewables division and other shareholdings.

“The impairments will reduce the non-operating result and therefore also the net income for 2013,” the statement.

However, they would not have an impact on underlying or operating profit, the group insisted.

“Throughout Europe, gas and hard coal-fired power stations in particular are under substantial economic pressure,” said chief executive Peter Terium.

“By recognising this impairment, we are taking account of the fundamental changes in framework conditions on the European generation market in particular.

“However, we are already reacting to the difficulties in terms of earnings –- with which all European power producers are faced –- and are further reducing the costs of our power plant fleet with resolve, in order to increase our earning power,” Terium said.

AFP
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