EnBW makes value adjustments on power plants and increases provisions for anticipated losses on long-term power purchase agreements
Karlsruhe. Pursuant to International Accounting Standards (IAS 36) EnBW is obliged to perform impairment tests both regularly and in the occurrence of certain events. During the preparation of the 2014 half-year financial statement, EnBW has identified the need to recognise additional impairment of about EUR 1.2 billion at the Group level on the power plant complex. Moreover, pursuant to IAS 37, the provisions for anticipated losses on no longer cost-covering power purchase agreements must be raised by about EUR 0.3 billion.
The reason for the extraordinary charges totalling EUR 1.5 billion, which are to be included in the consolidated financial statement of 30 June 2014, lies in considerably worsening expectations regarding long-term electricity price developments, particularly from today’s perspective and based on comprehensive market analyses.
The extraordinary charges will reduce the non-operating result and therefore will have no effect on the operating result (adjusted EBITDA). Consequently, they will neither have an impact on cash nor have an effect on the dividend calculation basis. Calculation of the dividend is based on the Group profit adjusted for extraordinary factors.
The extraordinary expenses will also have a negative effect on the statutory annual financial statement of EnBW AG. The precise extent of the effects, which will not jeopardise the distribution of dividends for the 2014 financial year, is yet to be determined.
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