Economy

Innogy takes €480m Npower hit as Tory energy market crackdown hurts margins

Innogy takes €480m Npower hit as Tory energy market crackdown hurts margins

FRANKFURT, Nov 13 (Reuters) - German utility Innogy cut 480 million euros ($560 million) off the value of its British electricity and gas supply business npower on Monday, warning more impairment charges could come after this month's deal to merge the unit with rival SSE's bigger retail arm.

"For some time now our business in the United Kingdom is facing huge competition and regulatory risks".

Innogy said it had written down the value of Npower partly in response to tightening regulations.

"Market conditions are now extreme", he added.

Npower has been written down by €480m (£428m) by its German owners following the United Kingdom government's crackdown on the energy sector, it was announced this morning.

Innogy said the planned tie-up did not impact its assessment of the impairment charge. SSE declined to comment on the news, saying npower remained a competitor for now.

More news: 'Qarib Qarib Singlle' 1st day box office collection!

Spun-off from German giant RWE in 2016, Innogy said the pressure on margins in Britain "is very high".

Innogy, which is Germany's largest energy firm by market value, saw profits for the whole group rise 8.7% to €2bn.

Npower made a loss before tax of €102m over the nine-month period, compared with a €81m loss in the same period last tear.

It underlined the challenges facing the sector days after the company agreed to merge the United Kingdom supply operation with that of Big Six rival SSE.

Shares in Innogy were down 0.6 percent at 0820 GMT.

Npower added 47,000 customers during the third quarter but revenue from the United Kingdom was hit by the weakness of the pound, which made this income lower when converted to euros.


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