ZURICH, March 26 (Reuters) - Swiss utility Alpiq has sold building technology businesses for 850 million Swiss francs ($897.19 million) to shore up its finances after announcing on Monday its fifth loss in seven years as low European power prices continue to weigh.
Its 2017 full-year loss was 84 million francs, compared with a profit of 294 million francs in 2016, Alpiq said.
Since 2011, Alpiq has racked up losses totaling about 4 billion francs, including from writedowns of money-losing hydropower assets whose electricity costs more to produce than the prices it commands from customers.
With 2018 expected to remain “challenging”, Chief Executive Jasmin Staiblin sold what had been Alpiq’s growth businesses, InTec and the Krafanlagen Group, to France’s Bouygues Construction. Reuters reported on Nov. 7 that Alpiq was working with Goldman Sachs to find buyers to help cut debt, boost cash and preserve access to capital markets.
“This divestment makes Alpiq fit for the future and allows it to focus on its core business, which comprises power production in Switzerland as well as international activities consisting of the flexible, diversified power plant portfolio, the new renewable energies and the strong market presence in energy trading,” Alpiq said in a statement.
In a separate statement, Zurich Insurance announced that Staiblin had withdrawn her name from consideration to join its board on the grounds that her attentions were needed elsewhere, including to help keep Alpiq afloat as operating results in the current year are forecast by the company to deteriorate.
She does see some bright spots on the horizon, however. A newly introduced market premium will “slightly ease” business for its Swiss hydropower assets, while Alpiq expects international energy trading and European power production to be profitable.
“In the medium to long term, Alpiq expects electricity and carbon dioxide wholesale prices to recover slightly, which will reduce the corresponding pressure on the results of Alpiq’s power production in Switzerland,” it said. ($1 = 0.9474 Swiss francs) (Reporting by John Miller, editing by Louise Heavens)