Eon posts €16bn loss but forecasts higher dividend

Eon, the German utility, posted a net loss of €16bn for 2016, more than double the loss for 2015, on the back of writedowns on power generation and higher provisions for Germany’s nuclear clean-up.

But it said that its adjusted earnings before interest and taxes were €3.1bn, which was at the upper end of its guidance range.

The company said it would propose a dividend of 21 cents per share for 2016 and 30 cents per share in 2017.

It said adjusted ebit would be between €2.8bn and €3.1bn.

Last year Eon split into two, pooling its coal and gas-fired power stations, energy trading and gas production units into a separate company, called Uniper, which debuted on the Frankfurt stock exchange in September.

The move, one of the largest corporate shake-ups in German post-war industrial history, came in response to the crisis in the German power sector caused by the Energiewende, the country’s radical shift away from nuclear power and fossil fuels. Abundant wind and solar energy has squeezed the conventional power generated by utilities like Eon and RWE out of the market and suppressed the wholesale price of electricity, making many gas and coal-fired power stations uneconomic.

Eon said its €16bn net loss for 2016 was mainly attributable to a loss from discontinued operations, reflecting impairment charges on Uniper operations.

Eon also was hit by the German government’s decision last year to make the utilities pay €23.6bn towards the cost of disposing and storing the country’s nuclear waste — much more than they had provisioned for. Eon will be responsible for about €10bn of that total.