FRANKFURT (Reuters) - EnBW (EBKG.DE), Germany’s third largest utility group, will rely on its power transport grids to generate future earnings, having decided to remain integrated in the face of split-ups by rivals RWE (RWEG.DE) and E.ON (EONGn.DE), finance chief Thomas Kusterer said on Saturday.
“Networks are an important part of our future business. (Investing in them) generates revenues and stable cash flows,” he said in an interview with the Boersenzeitung newspaper.
Unlike rivals that have spun off high-voltage networks operating across large distances, EnBW is Germany’s only big utility that retains such grids, which will be extended over the next decade to transport renewable power from windswept northern Germany to the south.
Investors are keen on the earnings from such infrastructure, although Germany’s regulator just this week curbed the fees that can be earned in this sector from 2019, Kusterer said.
While EnBW believed the cuts went too far, regulation overall extended to other factors as well, which might turn out to be more beneficial. “These parameters are still being looked at and worked out,” he said.
EnBW’s core profit fell by nearly a quarter in the first half, severely hit by conventional power and energy trading losses.
Talks were continuing with worker representatives over 400 planned job cuts that the company announced in June, along with other cost-cutting measures, to save an extra 250 million euros on top of an original target of 400 million, Kusterer said.
Asset sales were not on the agenda for now, and the focus would be on new investment decisions for offshore wind parks in Germany as well as onshore wind activities in Turkey, he said.
EnBW is due to decide on an investment in the offshore park Hohe See in the North Sea by year-end, where Kusterer said an external partner would be required from the construction phase onward.
Kusterer reiterated a forecast that 2016’s operating profit would come in between 5 and 10 percent below the 2.1 billion euros achieved in 2015.
Kusterer also said that EnBW had sufficient funds to shift into a nuclear fund, to which EnBW and three rivals must contribute, to shift liability for nuclear waste storage to the government, but talks with the government were continuing on the deal.
Reporting by Vera Eckert; Editing by Kevin Liffey