E.ON Loss

Up in Smoke

steam tower imago
A black hole for money.
  • Why it matters

    Why it matters

    E.ON’s high write-down is a step towards its new strategy, splitting the company between renewable and traditional power generation to stem losses in the latter business.

  • Facts


    • Germany wants to move away from nuclear power by 2022, and focus on renewables.
    • It aims is to have renewable sources make up 80 percent of the energy supply by 2050.
    • Subsidies for renewables have reduced margins for providers of electricity from coal, gas and nuclear power.
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Next week, Germany’s largest power company, E.ON, is expected to announce a record loss for a single year, a shortfall of €3 billion, or $3.3 billion.

E.ON is posting the 2014 loss as it writes down the value of large parts of its business ahead of a restructuring to speed its exit from fossil fuels, according to information obtained by Handelsblatt from sources close to E.ON.

The results will be made public at a press conference Wednesday after Chief Executive Johannes Teyssen presents figures to E.ON’s supervisory board, which hires and fires the chief executive and approves strategic decisions.

“It’s not surprising that E.ON is posting a loss. What’s interesting is how high it is,” said Stephan Wulf, an analyst at Warburg Research. “There are a lot of issues E.ON needs to address right now.”

Speculation about the level of loss at E.ON differ greatly in financial circles, with analyst estimates falling between €2 and €4 billion.

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