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German energy giant RWE is poised to cut jobs from UK retail arm Npower, and may even pull out of UK supply entirely.
The company’s chief financial officer Bernhard Guenther told Reuters that plummeting profits at Npower following billing data problems and a spate of customer losses mean RWE will need to make a plan by next March to fix the beleaguered unit.
But RWE has not ruled out selling the company either.
“We’re not categorically ruling out adjusting our portfolio of countries,” Guenther told Reuters, when asked whether RWE would choose to sell Npower at some point.
“But such a decision would also prompt the question: are we the better owner or is someone else?”
RWE reported double-digit operating profit losses in its first half financial results, blaming unexpected problems in its UK supply arm as a key contributor.
Earnings from the UK supply business plummeted 60 per cent from €133 million in the first half of last year to just €53 million in H1 2015 with further “significant deterioration” expected this year.
In stark contrast, RWE said that Europe-wide energy supply showed a positive trend, contributing €614 million Europe-wide to the operating result, up from €589 million in the previous half.
Shortly after the dismal results Npower chief executive Paul Massara stepped down along with the company’s chief financial officer Jens Madrian “by mutual consent”.
RWE said it acted “on the unexpectedly negative mid-year result for 2015” in announcing the departure of both Massara and Madrian.
A spokesman for Npower said: “We do not comment on speculation”.
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