EON takes €3-billion charge as prospects dim
EON, Germany's biggest power supplier, has taken a charge of some €3 billion ($4 billion) due to the diminished value of its assets because of the dim economic outlook in southern Europe.
"In connection with the preparation of 2011 annual report, EON has identified a group wide impairment charge of approximately €3 billion," the group said in a statement late on Monday.
"In Italy and Spain a more pessimistic view on long-term power prices, regulatory interventions and reduced load hours for gas and coal power stations, lead to a total impairment charge of €2.1 billion, mainly on spread generation assets in both countries," it said.
"Further impairment charge has been identified in Hungary and Slovakia with respect to spread generation assets as well as in Central Europe, mainly in Benelux."
"The impairements reduce the group's net income," it said, without elaborating.
EON added that there was no impact on adjusted earnings before interest and taxes (EBIT) and adjusted group net income.
"Furthermore, the impairments are not cash effective either," it stressed.
In November EON said that its profits fell sharply in the first nine months -- to €864 million ($1.2 billion) in the period from January to September from €3.522 billion a year earlier -- owing to the shutdown of power plants as part of Germany's policy to abandon nuclear energy.