Innogy feels pres­sure in UK mar­ket as it books £428m charge on NPower

Yorkshire Post - Business - - CAPITAL MARKETS -

EN­ERGY GI­ANT Innogy has booked a 480 mil­lion euro (£428m) charge on util­ity provider NPower as it grap­ples with the com­mer­cial and reg­u­la­tory pres­sures in the UK mar­ket.

The Ger­man firm said it was con­fronted by a “dif­fi­cult sit­u­a­tion” in the UK, driven by “very tough” com­pe­ti­tion, squeezed mar­gins and a pro­posed move by the Gov­ern­ment to cap poor value en­ergy tar­iffs. The hefty write­down comes as the Big Six en­ergy firms look likely to be­come the Big Five af­ter SSE and NPower an­nounced last week that they had reached an agree­ment to merge their op­er­a­tions to cre­ate a new en­ergy sup­plier in the UK.

How­ever, Innogy said the deal would have no im­pact on the im­pair­ment charge.

The firm added: “The com­pet­i­tive land­scape in the UK re­tail busi­ness re­mains very tough and pres­sure on mar­gins is very high.

“The UK Gov­ern­ment has ini­ti­ated re­cently the leg­isla­tive process to in­tro­duce a gen­eral price cap for stan­dard vari­able tar­iffs and is propos­ing an ex­pan­sion of the ex­ist­ing price cap for vul­ner­a­ble house­holds.

“As part of the an­nual im­pair­ment test, a good­will im­pair­ment of 480 mil­lion eu­ros for the UK re­tail busi­ness was recog­nised.”

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