RWE and E.On- Germany’s "big two” utilities- posted lackluster financial results last week, with bottom lines hit by the Ukraine crisis and a dysfunctional power market for plant operators. RWE said its €5.1 billion ($ 6.4 billion) deal to sell exploration unit DEA to Russian buyers was on hold pending approvals from jurisdictions where the company is active. Meanwhile, E.On reported a sharp drop in revenues from its main international operation in Moscow as the ruble continues to weaken.
Dusseldorf- based E.On said its EBITDA dropped by 7% to just more than €6.6 billion in the first three quarters of 2014, compared with €7.1 billion for the same period of 2013. Total gas sales dropped by 14%, to 754 TWh. The net profit of its Russian segment fell by around 9% year on year. E. On’s Chief Financial Officer Klaus Schaefer spoke to press and investors and admitted the ruble’s condition was worrying. Media speculation continues on whether more of the company’s assets in southern Europe and elsewhere will soon be disposed of, although company officials have declined to confirm details.
RWE- the smaller of the two utilities, both of which are based in the Ruhr region- saw its EBITDA fall 22% year on year between January and September, to €4.7 billion. The company posted the biggest loss in its history last year. "The main reason [for the higher previous result] was that the figures for 2013 included substantial extraordinary income”, RWE’s Chief Financial Officer Bernhard Gunther said in a conference call on November 13. "This was from the compensation we were awarded by an arbitration court in price revision proceedings with our gas supplier Gazprom. In addition, weather-induced revenue shortfalls in gas supply and a deterioration in generation margins came to bear”, Gunther added.
(Interfax)
