E.On has warned that pressures on the company in 2015 will not let up into 2016 as it reports a net loss. Its share price fell over 2.5 per cent on the news.
E.On reported a net loss of €7bn for 2015, down from a net loss of €3.1bn a year ago.
That came after it had to writedown €8.8bn on some of its power generation assets.
Yet, excluding writedowns, underlying net income came in at €1.6bn.
Earnings before interest, taxation, depreciation and amortisation was €7.6bn.
The group's dividend was 50 cents per share.
Why it's interesting
E.On has warned that factors putting pressure on its profitability in 2015 are unlikely to let up any time soon, having described the last year as “very difficult”.
The energy giant is is suffering from low wholesale power prices and a surge in renewable capacity.
Chief executive Johannes Teyssen said that "our earnings situation in 2015 reflected, in particular, impairment charges of €8.8bn" on loss-making power plants.
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These were recorded primarily on its generation assets after reviewing our assumptions regarding long-term development of electricity and fuel prices.
Germany is currently changing its energy policy, moving away from coal and nuclear power generation to renewables.
The company is in the process of separating its operations into two independent companies. Its power generation and energy trading business is being spun off into a company called Uniper.
Yesterday fellow German giant RWE reported an annual group loss, warning that results will get even worse before there is an improvement.
What E.On said
Eon’s chief executive, Johannes Teyssen, said:
[The divestments we have taken] improve our financial profile and enhance our flexibility to implement our strategy and reposition our company. We want to augment this impetus by successfully completing our new setup, as planned, this year.
This will give us a platform from which we can unequivocally devote all our energy to outperforming our competitors in the new and the conventional energy world.
E.On has posted its second consecutive record loss as it warns of difficult conditions ahead.