Frankfurt---German power supplier E.ON said Tuesday that "the persistently difficult situation on energy markets" and a drastic reorganisation pushed it deeply into the red in 2014.
E.ON said in a statement that it booked a bottom-line loss of 3.16 billion euros ($3.4 billion) last year, compared with profit of 2.09 billion euros a year earlier.
The group had already announced late last year that it would spin-off its conventional power activities to focus on renewable energy.
And it also booked impairment charges of 4.5 billion euros to reflect the current difficulties in the industry across Europe, which is experiencing persistently low prices on the wholesale electricity market.
Stripped of one-off factors, underlying net profit fell by 24 percent to 1.612 billion euros, E.ON said.
Revenues fell by 7.0 percent to 111.6 billion euros.
E.ON said it would pare back the dividend payout to 0.50 euros per share from 0.60 euros.
"Considering the continued difficult market environment in many countries, we're generally satisfied with our 2014 results, particularly since we achieved lasting cost reductions across our business and made a number of successful disposals," chief financial officer Klaus Schaefer said.
"But it's also true that extremely low oil prices, adverse changes in currency rates, and a further decline in power prices are having a significant effect on our business."
Looking ahead to the current year, E.ON said it was "cautious."
Full-year operating profit was projected to amount to 7.0-7.6 billion euros and underlying net profit to total 1.4-1.8 billion euros.
"We intend to invest in profitable growth this year as well and also to make selective investments to support our new strategy," CFO Schaefer said.
Regarding the planned spin-off, chief executive Johannes Teyssen said: "The preparations are making good progress. We intend to announce initial details about the two companies in the second quarter."
AFP
