Germany’s EnBW remains in the red on nuclear exit
Germany's EnBW remains deep in the red after the third quarter of 2011 but was able to slightly reduce its net loss to €552m for Q1-Q3 '11, the utility said on Friday.
The company's electricity and natural gas sales are on the rise due to a strong increase in trading activity, which had a positive impact on the interim results, the company said. Electricity sales rose by 6.4% year on year to 117TWh in Q1-Q3'11, while natural gas sales increased 13.5% to 43TWh (4 billion cubic metres).
The strong performance of the trading unit was one of the factors that helped reduce the company's loss, which stood at €590m after the first half of 2011. However, EnBW - which used to have a heavy focus on nuclear power generation - is far from having recovered from the impact of Germany's nuclear exit.
In the first nine months of 2010, EnBW posted a net profit of €1.2bn but started sliding into the red earlier this year mainly because of the government's temporary nuclear moratorium and its subsequent decision to phase out all nuclear power in the country by 2022. The political turnaround meant that EnBW's 926MW Philippsburg 1 and 840MW Neckarwestheim plants were shut down and had to permanently remain off line.
In addition, Germany's nuclear fuel tax continues to put pressure on EnBW's results. Despite two German courts having found in favour of plant operators launching legal appeals against the tax, the company said it expects a final legal decision which may lead to significant financial compensation for the company to be several years away. "Until that point, any potential effects on earnings cannot be taken into consideration," EnBW said in its interim report.
The nuclear fuel tax was initially introduced as compensation for extending the lifespan of the nuclear reactors, but was kept despite the nuclear phase-out decision, which sparked outrage among nuclear plant operators. As a result, the country's nuclear power plant operators stopped their tax payments and started putting the money into a renewable energy fund.
After EnBW's somewhat more positive performance in Q3 '11, it has slightly raised its expectations for the overall 2011 results. However, the company continues to expect a significant decline compared to 2010, with the group's adjusted earnings before interest and tax dropping by 20-25% year on year. JR
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