German energy firm E.On has said its annual net losses more than doubled in 2015 to €7bn (£5.4bn) after it wrote down the value of its loss making power plants by €8.8bn.
The company, which is one of the “big six” energy firms in the UK, blamed record low wholesale electricity prices.
The German government’s move towards renewable energy also hurt profits.
It is the second year that E.On has reported a loss.
In 2014, the energy firm reported a loss of €3.16bn.
On Tuesday, rival German energy firm RWE reported annual losses of €637m (£493m) blaming the collapse in commodity prices and, in particular, the continuing depression in the price of coal that has caused German wholesale electricity prices to plummet,
All four of Germany’s main large energy firms have written down the value of their power plants as a result of the slump in electricity prices. Wholesale electricity prices are at their lowest level since 2002.
Industry ‘transformation’
E.On is in the process of hiving off its more traditional forms of power generation, in particular coal-fired power generation, into a separate company called Uniper.
Uniper is expected to be listed on the German stock exchange some time during the second half of this year.
E.On itself will focus on what it calls the “new energy world” of renewable energy, including solar and wind energy.
“Our numbers reflect the far-reaching structural transformation that our industry is experiencing and that continues unabated in the current year,” E.On’s chief executive Johannes Teyssen said in a statement.
E.On warned that future profits, dividends and cash flows were expected to decline further to reflect worsening conditions in the power sector.
E.On is one of the largest energy companies operating in the UK, where it supplies electricity and gas to about five million customers.
Source: BBC
