Germany's largest utility, posts a record loss for the second year in a row following asset writedowns worth more than half its market value. As Hayley Platt reports it casts doubt over plans to spin-off its ailing power plants later this year.
One record loss is bad enough - but to follow it a year later with one that's twice as big - really isn't ideal. The 6.8 billion euro losses at E.ON for 2015 were largely expected. 8.8 billion euros - half the firm's market value - went on power plant writedowns as Germany moves away from nuclear energy and focuses on renewables. Then came the fall in wholesale electricity prices SOUNDBITE (English) CMC MARKETS, MARKET ANALYST, MICHAEL HEWSON, SAYING: "I think German energy providers in particular are feeling the effects of the navigational way by Angela Merkel from nuclear power and that is effecting their bottom line. It's effecting the valuations of their assets." Germany's largest utility is putting its power generation and energy trading divisions into a separate company called Uniper. The rest will focus on renewables, networks and services. SOUNDBITE (English) MCM MARKETS, MARKET ANALYST, MICHAEL HEWSON, SAYING: "I think the key test going forward is whether or not it is successful, whether E.ON is successful in actually being able to innovate in the context of it's renewables programme while at the same time spinning off its more legacy power supply programmes." E.ON's results followed similar pain at German rival RWE. It's now warning of lower payouts for investors as it conserves cash to fund future growth. Shares slid almost 1 percent after the results. Its stock has lost more than 40 percent of its value over the past year.