Pricier emission permits eat into Uniper profits; Innogy earnings also decrease
German fossil utility Uniper cited rising costs for carbon allowances as a main reason for declining profits in the first half of 2019. The utility's adjusted earnings before interest and taxes (EBIT) decreased by almost 50 percent from 601 million euros in the first half of 2018 to 308 million euros in the first half of 2019.
Innogy, the RWE renewables spin-off and largest power provider in Germany, also reported a decline in earnings before interest and taxes (EBIT) of about 16 percent compared to the first half of 2018, leaving it at 1.3 billion euros. This was due to problems related to the company's UK retail business, and sale of innogy's Czech gas grid business.
Germany's energy transition has shaken the country’s dominant power companies to the core, undermining their traditional business model of centralised power generation. Germany's second largest power provider, E.ON, split into two, now focusing on renewables, grids and customer solutions, leaving spin-off Uniper to focus on conventional generation and its energy commodity trading business. In a further deal that could drastically re-shape Germany's power sector, RWE and E.ON then agreed to split RWE subsidiary innogy and focus each on different parts of the business. E.ON will largely be in charge of distribution grids while RWE will concentrate on conventional and renewable power generation.