RWE suffers $3.85bn loss for 2013

RWE has reported a net loss of $3.85bn (€2.8bn) for 2013, the first time in 60 years that the company has posted an annual loss. RWE’s income in 2012 was €1.7bn.

Germany’s second largest utility saw a loss per share of €4.49, compared with earnings of €2.13 the previous year. The group said this was attributable to impairment losses of roughly €4.8bn, mainly from conventional power generation.
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Earnings before interest, tax, depreciation and amortisation for conventional power generation fell to €2.4bn for 2013, from €4.4bn the year before, a drop of about 44 per cent.

The German energiewende, or shift to renewables is cited as a key factor by the company, as subsidised solar and wind energy continue to squeeze out conventional power.

The utility said in its annual report: “Political intervention is making our business challenging. Declining margins, especially of gas-fired power stations, have already caused us to recognise considerable impairments. Should market conditions continue to deteriorate, we will be at risk of having to perform further writedowns.”

Renewables now account for 23 per cent of electricity consumption in Europe’s biggest economy.

As well as cutting its dividend, RWE (FWB: RWE) hopes to improve its financial position by selling assets, including its oil and gas exploration unit RWE Dea.

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