EON confirms up to 11,000 jobs will go
Germany's biggest energy group, EON, confirmed on Wednesday it would cut up to 11,000 jobs as it reported its first ever quarterly loss.
EON said it had a net loss of €1.49 billion ($2.14 billion) in the three months to June. The loss attributable to shareholders, a slightly wider definition of earnings, came in at €1.58 billion, compared with a profit of €1.63 billion in the second quarter of 2010.
A company statement said it would carry out a broad restructuring of its activities that would result in cutting 9,000 to 11,000 jobs, amid an expected loss of earnings sparked by the government's phase-out of nuclear power.
EON also cut its full-year forecast and expected dividend as earnings suffered from weaker sales of electricity and gas.
For the first half of the year, EON remained in profit, with a net income of €691 million, a figure that was nonetheless five times smaller than in the first six months of 2010.
EON pointed to a "massive decrease for all key earnings indicators," which it blamed on a sudden German government decision to mothball all nuclear reactors by 2022, starting in March.
The decision, following the March Japanese nuclear disaster, was accompanied by a tax on nuclear fuels that cut €1.9 billion from EON's operating profit, the group said.
It also suffered from long-term gas contracts at very unfavourable terms and poor results in its electricity brokerage activities.
The group slashed its full-year outlook and now expects a net profit excluding exceptional items of €2.1-2.6 billion from the previous estimate of €3.0-3.7 billion.
Shareholders were warned that prior guidance for a dividend of €1.3 per share would be cut to €1.0.
EON plans to restructure its operations to save €1.5 billion per year, and warned that "possibly 9,000 to 11,000 jobs could be affected" from a group total of around 79,000.
Details on planned job cuts are to be released in the coming weeks.
AFP/emh
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EON said it had a net loss of €1.49 billion ($2.14 billion) in the three months to June. The loss attributable to shareholders, a slightly wider definition of earnings, came in at €1.58 billion, compared with a profit of €1.63 billion in the second quarter of 2010.
A company statement said it would carry out a broad restructuring of its activities that would result in cutting 9,000 to 11,000 jobs, amid an expected loss of earnings sparked by the government's phase-out of nuclear power.
EON also cut its full-year forecast and expected dividend as earnings suffered from weaker sales of electricity and gas.
For the first half of the year, EON remained in profit, with a net income of €691 million, a figure that was nonetheless five times smaller than in the first six months of 2010.
EON pointed to a "massive decrease for all key earnings indicators," which it blamed on a sudden German government decision to mothball all nuclear reactors by 2022, starting in March.
The decision, following the March Japanese nuclear disaster, was accompanied by a tax on nuclear fuels that cut €1.9 billion from EON's operating profit, the group said.
It also suffered from long-term gas contracts at very unfavourable terms and poor results in its electricity brokerage activities.
The group slashed its full-year outlook and now expects a net profit excluding exceptional items of €2.1-2.6 billion from the previous estimate of €3.0-3.7 billion.
Shareholders were warned that prior guidance for a dividend of €1.3 per share would be cut to €1.0.
EON plans to restructure its operations to save €1.5 billion per year, and warned that "possibly 9,000 to 11,000 jobs could be affected" from a group total of around 79,000.
Details on planned job cuts are to be released in the coming weeks.
AFP/emh
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