RWE forced to scrap dividend again

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RWE's Niederaussem power plant in Bergheim, GermanyImage source, EPA
Image caption,
RWE's Niederaussem power plant in Bergheim, Germany

Energy company RWE has cancelled its dividend for the second successive year, after writedowns of 4.3bn euros (£3.6bn) on its power plants.

The UK, as well as the Netherlands and Turkey, was affected by the writedowns, which led to a surprise net loss of 5.7bn euros (£4.8bn) during 2016.

"The difficult market environment made impairments necessary," said RWE chief executive Rolf Martin Schmitz.

RWE, which owns Npower, said it planned to pay dividends again in 2017.

Analysts and investors had been expecting dividend payouts to resume for 2016, after the previous year when the company cancelled them for the first time in at least six decades.

Nuclear power

RWE, like most big European energy companies, faces the problem of low wholesale electricity prices and competition from heavily subsidised renewable energy rivals.

The group's performance was also dented by what it described as an "additional extraordinary burden" in the shape of new German legislation that forces energy firms to help pay for the country's move away from nuclear power.

RWE has to contribute about 6.8bn euros (£5.7bn) - 1.8bn euros (£1.5bn) of which was set aside in the 2016 results.

"The new regulations governing nuclear waste disposal are sensible, but require a great financial effort from RWE," said chief financial officer Markus Krebber.