E.ON has recorded a net first half loss of around $3.34bn in large part due to writing down the value of assets held by new spin-off conventional power unit, Uniper.

There was some positivity in the results, as the German electricity utility announced operating profit in its core business to be up 15 per cent.
Johannes Teyssen of E.ON
“The developments on the energy market demonstrate unambiguously that E.ON chose precisely the right strategy; namely, to seize opportunities in the new energy world,” E.ON Chief Executive Johannes Teyssen said in a statement.

E.ON’s net loss of €3.03 billion ($3.38 billion) in the six months to end-June is in contrast with profit of €1.15 billion recorded for the same period last year.

The utility said it took an impairment charge of €3.8 billion for Uniper, including €2.9 billion in write-downs on power stations and gas storage facilities, as well as €900 million in provisions. Revenue also declined, falling 11% to €20.25 billion.

The company continues to suffer from Europe-wide low wholesale electricity prices amid a power glut spawned by a rise in renewable energy and low commodity prices.

In June, E.ON won shareholder approval for a plan to spin off conventional energy and trading activities into a new company, Uniper, and to list around 53% of the new unit by year’s end.

E.ON said net debt came to €24.8 billion at end June, up from €21.3 billion at the end of 2015.

Connor Campbell, a senior market analyst at Spreadex.com told Power Engineering International “With Germany continuing its major shift towards renewable energy firms like E.ON are beginning to struggle. The company posted a €3bn lost for its fiscal first half, squeezed by a €2.9bn write-off on the value of its power stations. Yet despite this the company is still confident it can reach its full year targets, news that fell on deaf investor ears, the stock falling by nearly 3 per cent after the bell.”