Karlsruhe. The rating agency Moody’s today re-assessed EnBW Energie Baden-Württemberg AG and revised its assessment from A2 to A3. The outlook is negative.
The reason given by Moody’s for this downgrade by one notch is above all the lower level of income and cash flows due to the closure of two of EnBW’s nuclear power plants in 2011, the nuclear fuel tax and lower wholesale market prices. Moody’s acknowledges the extensive package of measures that EnBW has introduced, comprising a significant efficiency enhancement programme for sustainable cost savings of € 750 million, divestitures amounting to € 1.5 billion and capital measures such as the already implemented hybrid bond and a planned capital increase. Moody’s rating assessment takes into account support from the major shareholders in the planned capital increase. In addition, the rating considers EnBW’s shareholder structure. However, Moody’s states the fact that the state of Baden-Württemberg has not yet been the owner of EnBW for very long and that it therefore cannot derive any improvement in the rating classification from that fact. The negative outlook mostly reflects the implementation risk of these measures.
“EnBW retains its rating in the A category. This is good news, as a good credit rating is important if we are to maintain our competitiveness and future sustainability. Our next task will be to implement the measures to reinforce our financial strength as consistently as we have initiated them over the last few months,” says Hans-Peter Villis, CEO of EnBW.
Moody’s assumes that the measures to reinforce the capital structure and enhance profitability will lead to stabilisation of the financial ratios.
EnBW’s CFO Thomas Kusterer: “The assessment by Moody’s reflects confidence in EnBW’s financial strength while at the same time clearly highlighting how important our internal programme to increase efficiency and our divestiture targets are. It is essential to achieve the targets that we have set because they are a fundamental basis and prerequisite for our medium-term growth and financial strategy.”