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Germany’s RWE considers lawsuit against nuclear phase out

10 Nov 2011 15:26:48 | edem

After a drop in profits in the first nine months of 2011, Germany's RWE is considering joining E.ON in a planned lawsuit against the government's decision to phase out all nuclear power by 2022, CFO Rolf Pohlig said at the company's quarterly press conference on Thursday.

RWE's profits continue to be hit by the nuclear phase out, Pohlig said. From January to September, the company's net income amounted to €1.4bn, a decline of 46% compared with the same period last year.

E.ON CFO Marcus Schenck said on Wednesday that the planned lawsuit will be aimed at receiving compensation for the company's losses in its nuclear business, but did not comment on the details (see EDEM 9 November 2011).

Pohlig said that there were "many good reasons" for RWE to join the lawsuit, but stressed that the final decision had not been taken yet.

In August, RWE announced it would raise planned divestments to €11.0bn from €8.0bn in order to reduce its debt. It has already raised €1.3bn from selling the majority stake in its power transmission system operator (TSO) Amprion to a financial consortium, and aims to sell its Czech gas TSO Net4Gas by 2013.

Apart from the nuclear phase-out, RWE's results were pressured by a number of factors, including Germany's nuclear fuel tax, high-priced, long-term gas supply contracts and lower margins on electricity generation

In the first three quarters of 2011, the group produced 151TWh of electricity, 7% less than in the same period last year. Of the 2011 total, 36% was generated from lignite, 22% from hard coal, 19% from gas,18% from nuclear and 4% from renenewables.

RWE's electricity sales remained stable year on year, amounting to 224TWh in the first nine months of 2011, while gas sales dropped significantly because of relatively mild temperatures, which limited demand.

RWE Supply & Trading closed the first nine months with an operating loss of €842m after recording a profit of €67m in the same period last year. Pohlig said that this was partly caused by the fact that nearly all of RWE's electricity is sold in forward contracts, with delivery periods well ahead, meaning current high prices had only a minor impact on RWE Supply & Trading's year-to-date income. JR

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