Innogy writes off £428m on Npower

GETTYSSE’s dividend success was unsustainable

Losses at the United Kingdom supplier widened as margins were squeezed by tough competition and the weakness of the pound, Innogy said.

German energy giant Innogy has cut the value of its United Kingdom energy business Npower by €480m (£427m), amid a "difficult situation" in the United Kingdom market.

It cited Government plans to introduce a price cap as likely to "result in a further deterioration of the outlook for the United Kingdom retail business".

The German company, which was spun off from RWE a year ago, said that the €480 million impairment charge followed an annual review of the business which pointed to a "deterioration in commercial assumptions and tougher regulatory conditions" in the UK.

Last week, Innogy confirmed it planned to merge Npower with SSE's United Kingdom energy supply business to form a new company.

It said losses had widened by €21m as a customer exodus after price increases were announced in February could only be stemmed by offering cheaper deals.

"The hard market conditions and political pressure have intensified over the course of the year", Innogy said. The news business would be roughly the size of market leader British Gas and serve about 11.5 million customers.

The German energy giant reported earnings before interest and tax up 9% to €2bn for the first nine months of 2017, but the results showed what a burden its United Kingdom retail business has become.



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