Innogy said it was seeking closure on the “unusual situation” of being in the middle of the RWE/E.On asset swap, while its npower retail division continued to suffer at the hands of a “persistently poor” UK market.
Today the German power firm reported Q1 2019 earnings of €964 million, down significantly year-on-year, on the back of poor wind speeds and the drag of the npower unit it has failed to sell.
Npower was revealed to have lost 103,000 customers in the past year, causing the unit to slump to a €33 million loss in Q1 2019 having posted Q1 earnings of €55 million a year ago.
In January this year npower said 900 jobs were to go as part of a major cost reduction programme, indicating the scale of the issue affecting the company.
Innogy CFO Bernhard Günther however was quick to point towards the “unusual situation” the company finds itself in, being caught between current parent company RWE and E.On, its prospective owner once a previously-announced and complicated asset swap deal concludes.
Yesterday E.On said the transaction was progressing as planned, but innogy chief executive Uwe Tigges also said yesterday that it had made for a “turbulent year” and had been “anything but good news” for the company’s staff.
That npower remains on innogy’s books is also likely to be a source of frustration for the firm. It had been expected to be merged with the spun-out retail division of fellow Big Six supplier SSE, but that deal hit the rocks and was unceremoniously cancelled after the two failed to agree revised terms in the wake of Ofgem’s price cap.
Reuters reports that Günther has said prospective third parties have come forward for npower, but caveated that by suggesting that it did not mean they wanted to buy “the whole unit”.
Innogy has meanwhile stood by its forecasted 2019 earnings of €2.3 billion, some €300 million down what it recorded in 2018.
