Eon recorded net loss of €2.2bn last year

EON RECORDED a net loss of €2.2 billion last year after a net profit of €5.9 billion in 2010 as Germany’s nuclear phase-out, high gas wholesale prices, and economic slowdown left deep scars on the utility.

The Dusseldorf-based group said it would as a result slash its dividend by one-third to €1 per share for 2011, but promised shareholders a payout of €1.10 for this year and “at least” that level for the coming year.

While sales rose 22 per cent on trading, earnings before interest, taxes, depreciation and amortisation fell 30 per cent to €9.3 billion, with the biggest hit from the closure of German nuclear plants.

The German government idled seven of Germanys 17 nuclear reactors a year ago following the nuclear disaster in Fukushima and closed eight for good in June, scheduling the remainder for closure by 2022.

Eon said that move cost it €2.5 billion in Ebitda last year – the company and rival RWE are suing the government for damages – although economic downturn cost another €1 billion and high gas prices “roughly” another €700 million.

Eon has begun to refocus its European operations and expand elsewhere.

Eon said its renewables business, one of the world’s largest windpower producers, gained 21 per cent to €1.5 billion, while earnings in Russia, where it runs gas-fired power plants, rose almost 50 per cent to €600 million.

The company also said its cost-cutting programme, through which it wants to shed up to 11,000 of 80,000 workers, last year produced a “lasting earnings effect” of €400 billion – the eventual goal being €1.5 billion.

On top of that, Eon only two months ago took a first step towards expansion outside Europe when it committed to a joint-venture to run gas and coal fired power plants in Brazil and neighbouring countries.

Eon said Ebitda would come in at about €9.9 billion this year, and rise to about €12 billion in 2013. Underlying net income, adjusted for one-off effects, would rise to €2.5bn in 2012 after hitting €2.2bn last year. – Copyright The Financial Times Limited 2012