BERLIN: Massive impairments and low oil prices have pushed electricity giant E.ON into the red. The multi-billion loss comes as the country’s switch to renewable energy continues to put pressure on conventional utilities.
Germany’s largest power supplier suffered a net loss of 3.2 billion euros ($3.42 billion) in 2014 as massive impairments, plunging oil prices and a changing energy landscape continue to drag down profits.
The company’s earnings before interest, taxes, depreciation and amortization (EBITDA ) dropped 9 percent to 8.3 billion euros from 9.2 billion euros the year before. In the same period, underlying profit shrank 24 percent to 1.6 billion euros from 2.1 billion euros.
In a letter to shareholders, CEO Johannes Teyssen said the poor performance was “within the anticipated range.” The group had already raised the red flag last year after it booked 4.5 billion euros in fourth-quarter impairment charges, chiefly at its generation business in Italy, Sweden and the UK.
Low oil prices and a weak euros also left a dent in E.ON’s coffers.
“Extremely low oil prices, adverse changes in currency rates, and a further decline in power prices are having a significant effect on our business,” said CFO Klaus Schäfer in a press release.
“Considering the continued difficult market environment in many countries, we’re generally satisfied with our 2014 results,” he added.
