German nuclear phaseout pushes E.ON into the red | Business| Economy and finance news from a German perspective | DW | 14.03.2012
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German nuclear phaseout pushes E.ON into the red

Germany's biggest utility posted the heaviest loss in the company's history in 2011, announcing major layoffs to become profitable again this year. In post-nuclear Germany, the beginnings will be meager though.

E.ON booked a net loss of 2.219 billion euros ($2.9 billion) in 2011 – a substantial drop in earnings compared with 2010, when the power utility still made a profit of 5.853 billion euros.

The slip into red figures, the company said in a statement Wednesday, was to be attributed to a multi-billion euro writedown on company assets in Spain and Italy, as well as on the closure of two nuclear power plants in Germany.

E.ON lost income from the lucrative Isar 1 and Unterweser nuclear plants to the tune of 2.5 billion euros, after the German government decided last year to immediately shut down the eight oldest reactors in the country.

The move was prompted by safety concerns in the aftermath of the 2011 Fukushima nuclear disaster in Japan, and heralded the beginning of the complete phaseout of atomic energy in Germany by 2022.

"E.ON continued its consolidation course in a difficult business environment in 2011, and is past the worst," said chief executive Johannes Teyssen.

Complex restructuring

Teyssen also said that he expected to post an "earnings increase" in 2012 that would be "continued in the subsequent years."

In January, the company announced it had reached agreement with trade unions to scrap 11,000 jobs from its total staff of 85,000 employees worldwide.

The pact was intended to reduce payroll costs by 9.5 billion euros annually by 2015 in efforts to free up funds for investments. Formerly heavily reliant on nuclear power, the company now urgently needs funds for building wind turbines and other plants generating renewable forms of energy.

However, E.ON said that dividend payments for 2011 would only be "slightly reduced" from 1.50 euros to one euro, and increased again to 1.10 euros for the current year.

uhe/nk (dpa, AP)