By Michelle FITZPATRICK
Frankfurt Am Main (AFP) Feb 22, 2017
German energy provider RWE on Thursday announced a surprise loss of 5.7 billion euros for 2016, hit by writedowns on its plants and one-off costs related to the country's exit from nuclear power.
"The difficult market environment made impairments necessary. In addition, the nuclear energy fund imposed a substantial one-off burden on us," chief executive Rolf Martin Schmitz said in an unscheduled announcement.
RWE said it was forced to recognise impairments of 4.3 billion euros ($4.5 billion) last year, mainly on its unprofitable coal- and gas-fired plants in Germany.
But the company also wrote down the value of power plant assets in Britain, the Netherlands and Turkey.
Like most big European energy companies, RWE is battling low wholesale electricity prices and competition from heavily-subsidised rivals focussing on renewable energy sources such as wind, solar and biomass.
The group's performance was also dented by what it called an "additional extraordinary burden" in the shape of new German legislation that forces energy firms to help pay for the country's nuclear phase-out.
The German government, under Chancellor Angela Merkel, decided to move away from nuclear power by 2022 in the wake of the 2011 Fukushima disaster.
As part of the phase-out, the firms Vattenfall, EON, RWE and EnBW have to contribute 23.5 billion euros to a state fund for the long-term storage of nuclear waste.
RWE said it will pay about 6.8 billion euros towards the government fund -- 1.8 billion euros of which has already been set aside in its 2016 results.
The affected firms have long complained about the high price tag that comes with Germany's atomic power exit, but critics counter that they benefitted from massive state subsidies when the nuclear plants first went into operation.
- Dividend scrapped -
Battered by the writedowns on fossil fuel assets and the nuclear fund costs, RWE said it would not be paying dividends to ordinary shareholders in 2016 for the second year running.
Holders of preferred shares will receive 0.13 euros per share.
"The new regulations governing nuclear waste disposal are sensible, but require a great financial effort from RWE," chief financial officer Markus Krebber said in the statement.
Nevertheless, the group said it was confident about its outlook.
RWE has embarked on a huge restructuring and cost-cutting drive in a bid to reverse its flagging fortunes and those efforts are starting to pay off, it stressed.
"We look to the future with optimism," Schmitz said.
In an effort to adapt to a changing environment, RWE has announced thousands of job cuts in Europe.
It has also spun off its renewable energy and grid activities into a new publicly-traded firm called Innogy, following a similar move by main rival EON.
RWE said it expected to be able to pay all shareholders a dividend of 0.50 euros per share in 2017, a level it aims to "at least maintain" in the years to come.
"Through the successful reorganisation and enormous cost savings, we have set the stage for returning to paying a dividend reliably in the next and subsequent years," Krebber said.
Analysts at DZ Bank described the dividend promises as "positive" and voiced confidence in RWE's turnaround.
"We expect that the earnings decline can be halted from 2017," they said in a client note.
Shares in RWE fell by 0.30 percent to 13.46 euros in midday trading in Frankfurt, underperforming the Dax index of leading German firms which was up 0.10 percent.
The group will present its full-year results on March 14.
Moscow (Sputnik) Feb 22, 2017
Russian state-owned nuclear energy corporation Rosatom's subsidiaries produced the total of 7,900 metric tons of uranium in 2016, which is on the 2015 level, the company said Monday. "Uranium production: 7,900 tonnes (including 4,900 tonnes produced abroad)," the company said on its website, which also indicates that Rosatom's uranium production amounted to 7,900 metric tons in 2015 as wel ... read more
Nuclear Power News - Nuclear Science, Nuclear Technology
Powering The World in the 21st Century at Energy-Daily.com
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