German power giant RWE suspends dividend payouts after annual loss
RWE, Germany’s second-biggest power supplier, said Wednesday it will partially suspend dividend payouts after running up a loss in 2015 as a result of collapsing wholesale prices and weak profitability in the conventional power generation.
The announcement sent RWE shares into a nosedive on the Frankfurt stock exchange, where they were the biggest losers, plunging 10.6 percent to an intraday low of 10.55 euros in a generally firmer market.
Germany’s power suppliers have been hit in recent years by government plans to eliminate nuclear power by the next decade and champion a so-called “energy transition” away from fossil fuels such as coal towards renewable energy sources such as the wind and the sun.
Power utilities have complained that the cost of having to close down their nuclear power plants and the heavy subsidies afforded to renewable energy have pushed them deeply into the red.
RWE said in a statement it booked a net loss of 200 million euros ($223 million) in 2015 compared with net profit of 1.7 billion euros a year earlier.
The loss was due to a writedown of 2.1 billion euros on its power plants in Germany and Britain, RWE explained.
“The continued collapse of wholesale electricity prices came to bear, leading to an erosion of power plant margins,” RWE said in a statement.
“The prospects in the conventional power generation business have worsened further.”