Weakness at RWE's
British business npower continued to eat into the German
utility's profits, prompting investors to dump shares in a
company already struggling with a structural crisis at home.
RWE warned it would only just reach the bottom of a 1.1
billion to 1.3 billion euro forecast for underlying net profit
this year, blaming billing glitches in Britain and a loss of
customers there that has worsened during the year.
Small energy suppliers have been poaching customers from
Britain's six big power utilities, exploiting dissatisfaction
with service quality and soaring bills.
RWE said on Thursday it had lost about 200,000 customers in
Britain since the start of the year, sending npower to an
unexpected operating loss of 66 million euros ($71 million)
during the first nine months of 2015.
"This is an extra headache for RWE shareholders," a
Frankfurt-based trader said of the problems in Britain. "You
can't just blame it all on the weak environment."
Shares in RWE plunged as much as 9.9 percent making them the
worst performer in Frankfurt's blue-chip DAX index and
also weighing on the STOXX Europe 600 Utilities Index,
which was 0.3 percent lower.
Utilities in Germany have been hit by the country's decision
to close nuclear power stations, a plunge in wholesale power
prices and a rise in renewable capacity. For RWE, the problems
in Britain come as an additional concern.
"We were often only able to retain residential customers
with expired contracts by offering them new ones with more
favourable conditions," RWE Chief Financial Officer Bernhard
Guenther told reporters.
Bryan Garnier analyst Xavier Caroen kept a "sell" rating on
RWE, saying it was in a more difficult position than E.ON
, which reported a record third-quarter record loss on
Wednesday due to writedowns on its power plants.
RWE's nine-month operating profit fell 9 percent to 2.65
billion euros, putting it on track for its third consecutive
year of falling earnings and piling pressure on Chief Executive
Peter Terium to come up with a turnaround plan.
Terium has defended his decision not to follow larger peer
E.ON by breaking up the company, but he is under mounting
pressure to revive the 117-year old utility.
Its shares have halved in value since the beginning of the
year and are 89 percent below their 2007 peak.
(Reuters)