E.ON posts Euro190 mln total losses in RomaniaPublish date: 09-12-2009
E.ON Romania, the owner of former Distrigaz Nord and Electrica Moldova companies, has total losses worth RON 786 million (nearly €190 mln), from gas and electricity distribution and supply activities developed locally, the company's Chairman of the Board, Frank Hajdinjak, told Business Standard.
According to Hajdinjak, the reason for these losses is the fact that certain expenses in the 2007-2009 period were not included in the rates approved by the Romanian Energy Regulatory Authority (ANRE). In this context, E.ON is on the verge of laying off up to 100 employees, following the departure of more than 1,000 employees from the group's companies since the beginning of this year, as part of voluntary resignation programmes, run shortly after the privatization.
The official said that expenses not recognized by ANRE in the approved rates, as well as the economic downturn, led to the decline in scheduled investments by the German company in the local business.
"The decline in investments was of 40 percent in 2009, due to the economic crisis and unrecovered expenses. We are far below the optimal investment return target, and financing costs are now higher," added Hajdinjak.
He indicated that Romania in now in a position where it needs investments badly, especially in energy infrastructure, but the country must "provide stability and a fair regulatory policy."
E.ON plans to invest some €60 mln in 2010, according to Hajdinjak, an amount similar to that in 2009. The official expects 2010 to be a year as difficult as 2009, and is hoping for the 0.5 percent economic rebound forecast for Romania by the International Monetary Fund.
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