German utility E.ON will shed assets and cut jobs to reduce its debt pile, after impairments on its former power plant unit Uniper triggered a 16 billion euro net loss, more than its current market value. Sara Hemrajani reports.
Choking on the cost of the fossil fuel business. Energy producer E.On has posted a record full-year loss of 16 billion euros - more than its current market value. Weighing on the books - the charges related to the spinoff of its power plant unit. But E.On's bosses are confident of a turnaround. They're shedding assets and slashing jobs to reduce the multi-billion euro debt pile. Analysts say the shift to renewables and a drop in power prices have taken a deep toll on the sector. (Soundbite) Jeremy Cook, Chief Economist, World First, saying (English): "We've seen increased costs which have obviously hurt margins. We've started to see a democratisation of the energy supply within Europe and obviously within the United States and in the UK as well. So everything's been acting against E.On and acting against these kind of companies for the past couple of years, and you can obviously see that in the share price. It's not through lack of demand, it's not like people are not demanding their services anymore, it's more a case of margin compression." Those pressures could lead to a bigger shake-up of Europe's energy companies. RWE, for one, says it's considering various options amid speculation of M&A deals with its rivals. On Tuesday, the German utility forecast rising profits for 2017, expecting to earn as much as 5.7 billion euros.