BERLIN, May 14 (Xinhua) -- Falling profits and heavy customer losses were added to the woes of embattled German renewable energy provider Innogy during the first quarter (Q1) of 2018, the RWE subsidiary told press on Monday.
According to Innogy, Q1 earnings before profit and taxes fell by 2 percent to 1.23 billion euros (1.47 billion U.S. dollars) with losses in the electric mobility unit amounting to 50 million euros.
At the same time, around 250,000 international customers abandoned the Essen-based company which faces the prospect of being dismantled in a widely-publicized deal agreed between energy sector giants RWE and E.ON.
The company blamed the negative development of earnings on an increase in purchasing costs and a related poor financial result for sales. The German sales unit hereby witnessed a decline in Q1 operative profits from 268 million euros to 211 million euros compared to the same period last year.
Nevertheless, Innogy re-affirmed an earlier earnings outlook for the fiscal year. The company highlighted that while its long-troubled British branch Npower had lost 115,000 customers as well, it was still able to raise its operative profits by 26.5 percent to 43 million euros thanks to successful restructuring efforts. Additionally, business with renewable energy generation and grid operation developed favorably.
Both Innogy chief executive officer (CEO) Uwe Tigges and chief financial officer (CFO) have announced that they will release a new statement on the progress of the RWE- E.ON deal Monday. Earlier, the company's management and supervisory refused to give their recommendation to a formal sales offer made by E.ON to minority shareholders of Innogy.
E.ON wants to acquire Innogy completely and is offering RWE a stake in its own business for the 76.8 percent of Innogy shares held by the energy sector rival. E.ON would then take over Innogy's lucrative grid business, while its renewable energy generation is concentrated under the corporate umbrella of the RWE mother corporation. As a consequence, the two-year-old subsidiary Innogy would cease to exist.
The deal worth around 20 billion euros has largely been welcomed by policymakers and trade unions as an example of positive corporate restructuring. In order to complete the transaction, however, E.ON must also persuade investors holding the remaining 23.2 percent of Innogy shares to sell their stocks for 38.4 euros per share. It remains unclear whether minority shareholders will accept the offer after signaling their disappointment with plans to break-up Innogy at the company's Annual General Meeting (AGM).
