3 Min Read
* Writedowns of 1.12 billion euros, capex cut 300 mln eur
* 1.15 bln eur cash inflows, one-offs from E.ON asset swap
* EBITDA forecast raised to 1.15 billion euros (Adds details on writedowns, capex, background)
By Georgina Prodhan
VIENNA, June 12 (Reuters) - Austrian hydropower firm Verbund said it would write down its assets by 1.13 billion euros ($1.5 billion) and cut investments again as electricity markets deteriorated sharply.
Verbund said it expected 2013 earnings before interest, tax, depreciation and amortisation (EBITDA) of 1.15 billion euros, up from its previous estimate of 1 billion, due to cash inflows and non-recurring effects from an asset swap with E.ON.
The company said it was forced to write down gas and renewables assets due to the poor market environment, in which wholesale gas and electricity prices are bring driven down by a glut of renewable energy and cheap carbon emission certificates.
"Economic conditions for electricity suppliers in Europe have deteriorated even more in recent weeks," Verbund said in a statement on Wednesday. "This is primarily a result of the massive oversubsidisation of new renewable energy."
European utilities have begun selling off assets amid weak demand from manufacturers, who are key consumers of energy, and plunging wholesale prices, especially in Germany.
Germany's biggest electricity supplier, RWE, said earlier that German wholesale power prices did not allow operators sufficient revenue, and urged a new market system to uphold future supply.
Verbund said it would cut its investments between now and 2017 by a further 300 million euros, on top of a 700 million-euro cut it announced a month ago, to 1.2 billion euros. It also announced extra cost cuts of 130 million euros to 2015.
It said it would write down its combined cycle gas turbine power plants in Austria and France by 659 million euros, its interest in Italy's Sorgenia by 371 million and its renewable energy projects and equity interests by 96 million.
Thanks to 1.3 billion euros from the E.ON asset swap and expected better-than-average water supply, it said net profit would rise 54 percent this year to at least 600 million euros, and stuck to its plan to pay a dividend of 1 euro per share. ($1 = 0.7498 euros) (Editing by Michael Shields and David Holmes)