By Marcus Leach
Today (Tuesday) the E.ON Board of Management informed the Supervisory Board about the current financial situation of the company.
Additionally the Supervisory Board was informed about plans to transform the company into a European Company (SE). Furthermore E.ON has published an ad-hoc-release on impairment charges of € 3 billion resulting from a series of triggering events.
In Italy and Spain a more pessimistic view on long-term power prices, regulatory interventions and reduced load hours for gas and coal power stations, lead to a total impairment charge of € 2.1 billion, mainly on spread generation assets in both countries.
In addition, lower than expected volume and margin assumptions for some of E.ON’s Eastern European spread generation assets in Hungary and Slovakia trigger an impairment of € 0.4 billion.
In Central Europe, mainly in Benelux, impairments amount to € 0.5 billion. Main effects are the earlier than previously scheduled shut down of older generation assets for profitability reasons on the back of lower volumes and margins, and lower earnings power of heat-run power stations and the consumer heat business due to adverse market developments.
E.ON will shut down around 6 GW of generating capacity in the next 3 years due to regulatory requirements or due to the end of stations’ economic lifetime. Additionally E.ON is investigating further closures on a plant by plant basis due to the above mentioned subdued environment for spread generation.
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