EON posts 6-bn-euro loss

AFP, FRANKFURT: German energy giant EON yesterday said it had booked a loss of 6.4 billion euros in the third quarter after massively overvaluing its fossil fuels spin-off Uniper.
Uniper made its debut on the stock market in September where it has been trading at about a third the value estimated by its parent company, resulting in 6.1 billion euros ($6.7 billion) in impairment charges for EON.
“EON had to adjust Uniper’s book value to reflect its market capitalisation,” the group said in a statement. The writedown, widely expected by analysts, contributed to a net loss of 9.3 billion euros for the first nine months of the year, EON added.
EON created Uniper to take over its fossil fuel operations so it could focus on renewable energy as part of Germany’s transition to cleaner forms of electricity generation.
Like other energy firms in the country, EON has been battling to adapt to a new environment of low wholesale electricity prices and competition from government-subsidised renewables. Since its flotation in Frankfurt, Uniper has been trading at a market capitalisation of around four billion euros, well below the 12-billion-euro book value given to it by EON.
Despite the bad news, the utility confirmed its full-year outlook, saying it expected adjusted earnings before tax and interest of between 2.7 and 3.1 billion euros, and a net profit of between 600 million to one billion euros.

EON posts 6-bn-euro loss

AFP, FRANKFURT: German energy giant EON yesterday said it had booked a loss of 6.4 billion euros in the third quarter after massively overvaluing its fossil fuels spin-off Uniper. Uniper made its debut on the stock market in September where it has been trading at about a third the value estimated by its parent company, resulting in 6.1 billion euros ($6.7 billion) in impairment charges for EON. EON had to adjust Unipers book value to reflect its market capitalisation, the group said in a statement. The writedown, widely expected by analysts, contributed to a net loss of 9.3 billion euros for the first nine months of the year, EON added. EON created Uniper to take over its fossil fuel operations so it could focus on renewable energy as part of Germanys transition to cleaner forms of electricity generation. Like other energy firms in the country, EON has been battling to adapt to a new environment of low wholesale electricity prices and competition from government-subsidised renewables. Since its flotation in Frankfurt, Uniper has been trading at a market capitalisation of around four billion euros, well below the 12-billion-euro book value given to it by EON. Despite the bad news, the utility confirmed its full-year outlook, saying it expected adjusted earnings before tax and interest of between 2.7 and 3.1 billion euros, and a net profit of between 600 million to one billion euros.