Energy giant E.ON takes big charge on European asset values

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The biggest German power company, E.ON, said on Wednesday it would book charges worth 2.6 billion euros (3.6 billion dollars) because of a fall in the value of assets in France, Italy and Spain.

The assets were bought by E.ON after the Spanish group Endesa was acquired by the Spanish/Italian consortium Acciona/Enel.

E.ON had sought to buy Endesa as well but had to settle for parts left over from the Italian/Spanish deal.

The German group said in a statement that since its last valuations in 2009, "it believes the market environment in Italy, Spain, and France has deteriorated due to the negative impact of the financial and economic crisis."

E.ON added that the charges will "reduce the group's net income" but did not say by how much.

But the new accounting would not change E.ON's operating target, it added.

The power company still expects core earnings before interest and taxes to grow by up to three percent this year, and a net profit at least equal to that reported in 2009.

In the first nine months of 2010, E.ON said it had made an adjusted operating profit of eight billion euros, a gain of nine percent from the same period a year earlier.

© 2010 AFP

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