E.ON plays down rouble effect on Russian business

Germany’s top utility says its plans to spin off its Russian business in 2016 remain on course despite the 20 per cent plunge in the rouble.

E.ON owns 10.3 GW of Russia’s generation capacity, more than 4 per cent of the total, and is also a partner in the huge Yuzhno Russkoye gas field in Siberia.
“Our business in Russia has been a solid profit driver for six years,” a spokesman for the company said in an emailed statement on Wednesday, adding that the swings in the rouble would not affect its long-term investment plans.

“E.ON continues to have faith in the stable investment conditions that have been guaranteed by the Russian government so far.”

Essen-based E.ON has repeatedly sought to reassure investors, but the rouble’s performance against the dollar over the past two days triggered a massive interest rate increase by the central bank and cranked up the pressure on companies on the ground.

The weakening of the rouble in the face of Western sanctions over the Ukraine crisis has already hit profits at the German utility’s Russian operations , in which it has invested about 6 billion euros ($7.5bn) since 2007.

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