Germany's Innogy posts weak half-year earnings ahead of break-up

Source: Xinhua| 2018-08-10 23:51:00|Editor: Mu Xuequan
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BERLIN, Aug. 10 (Xinhua) -- High costs and a dearth of wind have weighed on the earnings of Innogy during the first half of 2018, figures published on Friday by the German renewable energy provider showed.

Gross revenue at the publicly-listed company fell by an annual rate of 4.8 percent to 20.6 billion euros (23.6 billion U.S. dollars) between January and June. During the same period, earnings before interest and taxes (Ebit) fell by 10 percent to 1.6 billion euros.

The Essen-based company attributed the development to higher costs for the purchase of Dutch natural gas, as well as a dearth of wind during the first six months of 2018.

"Innogy's financial development during the first half of the year was in line with our expectations," said chief financial officer (CFO) Bernhard Guenther. Guenther re-affirmed an earlier forecast that the company would record adjusted net annual profits of 1.1 billion euros in 2018.

Innogy is on the verge of being dismantled in a major energy sector deal agreed between its parent company RWE and E.ON, its German rival. E.ON wants to acquire Innogy completely and is offering RWE a stake in its own business for the 76.8 percent of Innogy shares which it currently holds.

E.ON would then take over Innogy's lucrative grid business, while its renewable energy generation is concentrated under the corporate umbrella of the RWE mother corporation. As a consequence, Innogy, which was created as a RWE subsidiary only two years ago, would cease to exist.

The 20-billion-euro deal has largely been welcomed by German policy makers and trade unions as an example of positive corporate restructuring. Innogy's management initially expressed concern over the plans by RWE and E.ON to reduce the company's current headcount of more than 70,000 staff by 5,000, but has since reached an agreement which seeks to effectively prevent any layoffs.

Innogy announced in July that it would support the plans for its own break-up and help obtain the necessary regulatory approval.

"I have the feeling that we now have clarity (with regards to the future of the company)," Innogy chief executive officer (CEO) Uwe Tigges said on Friday.