* CEO says gas, coal-fired plants under substantial pressure
* Also takes charges on renewables business
* Shares down 1.2 pct, underperforming European utilities
* RWE to announce 2013 results March 4
(Recasts, adds detail, analyst, updates shares)
By Christoph Steitz
FRANKFURT, Jan 28 German utility RWE
announced a 2013 writedown on Tuesday of 3.3 billion euros ($4.5
billion), more than twice its net profit a year earlier,
reflecting losses at coal and gas-fired power plants hit by low
wholesale prices and rival renewables.
Top German utilities RWE, E.ON and EnBW
have all announced plans to close or mothball thousands of
megawatts of coal and gas plant capacity.
The companies are being squeezed between high gas costs and
low wholesale power prices while slower economic growth and
surging renewables supply softens demand.
French peer GDF Suez has also warned that it plans
to write down European power assets.
"Throughout Europe, gas and hard coal-fired power stations
in particular are under substantial economic pressure," RWE
Chief Executive Peter Terium said on Tuesday.
"By recognising this impairment, we are taking account of
the fundamental changes in framework conditions on the European
generation market, in particular."
Of the 3.3 billion euros in total charges, about 2.9 billion
euros will be made on the group's conventional power generation
segment, RWE said, adding that its renewables business would
also be affected.
"We reiterate our view that RWE will announce further power
plant closures and expect further newsflow over the next few
months," Goldman Sachs analyst Deborah Wilkens wrote in a note
following RWE's announcement.
RWE said last year it would take 3,100 megawatts (MW) of
power plant capacity in Germany and the Netherlands off line,
about 6 percent of its European total of 52,000 MW.
Chief Operating Officer Rolf Martin Schmitz said last week
that RWE was currently not planning to mothball any more units.
Larger peer E.ON has announced it will mothball or shut down
at least 11,000 MW of power plant capacity in Europe. Asked
about possible writedowns, a spokesman said E.ON currently saw
no need to take impairment charges.
Shares in RWE were down 1.2 percent at 1321 GMT, one of the
biggest decliners in Germany's benchmark DAX index and
lagging a flat STOXX Europe 600 Utilities Index.
RWE, which is due to publish full 2013 results on March 4,
said the charge would hit its net income for last year but not
its recurrent net income, the benchmark figure for its dividend.
The company said it still expected a recurrent net income of
about 2.4 billion euros, an operating result of about 5.9
billion and earnings before interest, tax, depreciation and
amortisation (EBITDA) of about 9 billion.
($1 = 0.7313 euro)
(Additional reporting by Matthias Inverardi in Duesseldorf;
editing by Jason Neely)