Germany energy utility company RWE complained about a very unprofitable fiscal 2011, claiming that unfavorable conditions on the gas market and Germany's accelerated nuclear phaseout had harmed the firm.
Germany's second-largest power supplier, RWE, announced on Tuesday that its 2011 net profit fell by 33.9 percent year-on-year to 2.497 billion euros ($3.3 billion).
Operating profit last year dipped by 24.3 percent to 5.814 billion euros on a 3.1-percent drop in revenues.
"For us, fiscal 2011 was marked by difficult economic and political framework conditions," RWE said in a statement. The Essen-based company said earnings were particularly squeezed by a one-billion-euro charge related to the shutdown of some of its nuclear power plants.
In the wake of the nuclear disaster in Fukushima, Japan, the German government decided to accelerate the complete phaseout of nuclear power in the country and levy a tax on the reactors' fuel for their remaining lifespan.
But RWE also suffered from unfavorable conditions on the gas market and persistently lower margins in the electricity generating business, the group complained.
Hands tied by contracts
In line with RWE's long-term contracts with exporters such as Russia, the company had to pay higher gas prices for deliveries last year than were generally in evidence on the market.
In its core market Germany, RWE earnings dropped 25 percent in 2011 year-on-year. Electricity generation even decreased by 33 percent.
However, RWE Innogy – a subsidiary specializing in the use of renewables – was able to double year-on-year profits, which totaled 181 million euros in 2011.
RWE Chief executive Jürgen Grossmann said he was confident that the company would get out of the doldrums again soon.
"We've undertaken a package of measures to get us through the trough quickly," Grossmann said. Some of the measures are geared to raising the company's efficiency and are expected to reduce operating costs by half a billion euros, starting from 2013.
hg/nk (AFP, dapd)