Reactor shutdowns impact EnBW's earnings

Friday, 1 March 2013

The forced closure of two of its four nuclear power reactors in 2011 contributed to a 4.3% drop in profits in 2012, German utility EnBW reported.

Neckarwestheim (Image: EnBW)

The company said that total sales grew 2.6% in 2012 to €19.3 billion ($25.0 billion). However, as expected, earnings before interest, tax, depreciation and amortization adjusted for non-operating effects fell by 4.3% in 2012 to €2.3 billion ($3.0 billion).

The decrease in adjusted earnings was essentially due to the 18% fall in the electricity generation and trading segment, "primarily as a result of falling electricity prices on wholesale markets and the loss of earnings due to the permanent shutdown of two nuclear power plants," according to EnBW.

The utility reported that unit sales of electricity in 2012, at 135.4 billion kilowatt-hours (kWh), were 12.8% lower than the amount sold in 2011. It attributed this drop "to the fall in trading activities, among other things due to the shutdown of two nuclear power plants."

In contrast, earnings in the electricity grid and sales segment grew by 42.4% to €685.7 million ($890.6 million) in 2012. Meanwhile, EnBW's unit sales of gas increased 27.4% to 73.1 billion kWh.

"The past fiscal year was not an easy one," said EnBW chief financial officer Thomas Kusterer. "Nevertheless, EnBW created the necessary financial headroom in 2012 to realign its business model while maintaining its sound financial position."

EnBW CEO Frank Mastiaux commented, "The balance sheet for 2012 shows that EnBW's traditional business model remains under considerable pressure. This has structural causes and is not merely a temporary phenomenon. Even in the next few years we will see these negative effects having a considerable impact as we cannot assume that the market in its current state will recover substantially."

EnBW's Philippsburg 1 and Neckarwestheim 1 were both among the older reactor units that Chancellor Angela Merkel forced to close early in the week of the Fukushima accident in March 2011. Built in 1976 and 1981 respectively, their operation had been set to continue until 2017 and 2026. Merkel's move, however, brought their power generation careers to an abrupt end. The newer Philippsburg 2 and Neckarwestheim 2 units continue to operate but are scheduled to shut down in 2019 and 2022 respectively.

Researched and written
by World Nuclear News