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Innogy cuts profit outlook for retail unit as British woes continue

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By Reuters
Innogy cuts profit outlook for retail unit as British woes continue
FILE PHOTO: A car drives past a fast-charging unit of Germany's first solar-powered 210kWh charging park with battery backup by German ecological power supplier Innogy SE in Duisburg, Germany, January 8, 2019. REUTERS/Wolfgang Rattay   -   Copyright  WOLFGANG RATTAY(Reuters)

FRANKFURT (Reuters) – German energy group Innogy on Thursday cut the profit outlook for its retail division, which will soon be part of E.ON, as a price cap in the British market continued to weigh on profits.

The group now expects adjusted earnings before interest and tax (EBIT) of 200-300 million euros ($220-$331 million) at its retail unit in 2019, down from a previous outlook of 300-400 million.

Npower, Innogy’s British retail unit, lost 261,000 customers during the third quarter, bringing total customer losses to 447,000 so far this year. The division posted a nine-month adjusted operating loss of 167 million euros.

The unit, which has been a problem for years due to both external and internal problems, will soon be an issue for E.ON, which acquired Innogy’s retail and networks assets as part of an asset swap with Innogy’s former parent RWE.

E.ON will report nine-month results on Friday and management, when asked about Npower, has said it would not tolerate a loss-making business for long. Npower is expected to post an operating loss of 250 million euros in 2019.

Innogy also said that had to book about 200 million euros in impairments related to its Nordsee Ost offshore wind farm, triggered by the bankruptcy of service provider Senvion earlier this year.

(Reporting by Christoph Steitz, Editing by Riham Alkousaa & Kim Coghill)