ESSEN, Germany, Feb. 17 (UPI) -- German energy company RWE said it was moving on a proposal to suspend dividends for common shares in order to move through "difficult times."
The company said it recorded a net loss of around $225 million for the year, saying its operating earnings collapsed despite earnings from its renewables division that more than doubled. RWE said that, along with crude oil prices, the conventional utilities sector declined, causing the company to take a $2.3 billion impairment on German and British power stations. Net income was "unusually weak"
"We adopted a series of measures which will equip the group for difficult times while tapping into new business prospects at the same time," CEO Peter Terium said in a statement. "We are working on this with resolve."
Among the proposals was one from the board to suspend dividend payments to holders of common shares held in 2015. Terium said the decision was not easy, but was necessary in order to support the company's overall momentum through the weakened energy market.
The company last year said it would create a new subsidiary to manage renewable energy that will be majority-owned by RWE, but according to Fitch Ratings add "an extra layer of complexity and uncertainty for RWE's creditors."
RWE said the new subsidiary will be listed by late 2016 and use the proceeds from share sales to finance future growth. It will be a new entity under the same roof with a strong wind-centric renewables portfolio, more than 23 million retail customers and an efficient grid network spread out over much of Central Europe, the company said.
For 2016, the company said its expected net income of around $550 million represents a "considerable decline" compared with last year. Last year's pressure on its business sectors is expected to linger, though debt and headcounts are unlikely to change.