EnBW rating slips

20 April 2004 - Standard & Poor's Ratings Services (S&P) has lowered its long-term corporate credit rating on Germany based energy utility Energie Baden Wuerttemberg AG (EnBW) to 'A-' from 'A'.

S&P say that the outlook is 'stable' for EnBW but at the same time it has lowered its short-term ratings on the company to 'A-2' from 'A-1'.

"The rating actions reflect the deterioration of the company's financial profile over the last couple of years following a series of acquisitions and a formerly aggressive supply strategy," said Standard & Poor's Infrastructure Finance credit analyst Ralf Etzelmueller. "Results and credit protection measures in 2003 were negatively affected by one-off restructuring charges, a portion of which will involve a cash outlay over coming years, and continued delays to an expected capital increase."

The new management team's focus since May 2003 on controlling operating and investment costs is positive but ambitious. Despite benefits from strong minority shareholders, Electricité de France (AA-/Negative/A-1+) and OEW, a group of public sector entities, uncertainty exists regarding the company's ultimate shareholder structure. Furthermore, there have been a succession of management changes and the group's CEO has continued to undertake the CFO role nine months after the departure of the previous CFO. These factors create a degree of uncertainty about the company's future profile.

The stable outlook reflects the expectation that management will maintain its focus on cost-cutting and earnings and cash flow improvement, and includes the potential for moderate capital increases from existing owners in the short term. In the absence of any major disposals, flexibility for acquisitions is limited, in light of the high debt burden and the company's rating targets.


Sponsored by FLSmidth

Related Articles

 Basin Electric wants to expand Williston-area power station

Basin Electric wants to expand Williston-area power station

Basin Electric Power Cooperative wants to expand the capacity of its 135-megawatt Pioneer Generating Station about 15 miles northwest of Williston.

 Vermont House endorses renewable energy package

Vermont House endorses renewable energy package

The Vermont House has advanced a wide-ranging bill that pushes utilities beyond electricity to help customers save on heat and could resolve criticism that the current state program to promote renewable energy double counts its results.

Follow Power Engineering on Twitter
Latest News

MHPS to supply M501J gas, steam turbines to new combined-cycle power plant in Korea

Mitsubishi Hitachi Power Systems (MHPS), jointly with Marubeni Corp., has received an order f...

Business leaders throw support behind coal plant proposal

Business leaders on Thursday outlined the economic devastation they say could come if New Mex...

TVA seeks public comment for future coal ash storage at Bull Run

The Tennessee Valley Authority (TVA) is asking for public input on plans to expand dry onsite...

California Public Utilities Commission Approves NRG Energy’s Carlsbad Energy Center

California Public Utilities Commission (CPUC) has approved the SDG&E Power Purchase and T...

Vermont joins international effort to fight climate change

Gov. Peter Shumlin says Vermont has signed on to what he called a first-of-its-kind agreement...

Products May 2015

Callaway Energy Center's Replacement Reactor Vessel Closure Head Project

Replacing heavy equipment is one way utilities can extend the life and increase the reliabili...

Managing CCRs and Process Water: Why Handling Bottom Ash Wet May Remain The Best Option

The U.S. coal-fired electric generation industry once again finds itself in the crosshairs of...

Power Engineering Current Issue

02/01/2015
Volume 119, Issue 2
1502PE-cover
Products Showcase
Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015

Buyers Guide Categories

Power Industry Wire News

MIC President Marybeth Miceli Named to AATA Board of Directors; AATA to Provide Free NDT Job Training to Vets, Disadvantaged Young Adults

MIC President Marybeth Miceli Named to AATA Board of Directors; AATA to Provide Free ND...

Alexium Anticipates Potential Addressable Revenue of More Than US$10M for 2015

Alexium Anticipates Potential Addressable Revenue of More Than US$10M for 2015

Upcoming Greenhouse Webinar Teaches Companies How to Engage Engineers in Hiring Top Tech Talent

Upcoming Greenhouse Webinar Teaches Companies How to Engage Engineers in Hiring Top Tec...

Perma-Fix Environmental Services to Present at the Marcum MicroCap Conference

Perma-Fix Environmental Services to Present at the Marcum MicroCap Conference

Blue Earth Receives Notice From NASDAQ That the Company Is No Longer Subject to a Possible Delisting

Blue Earth Receives Notice From NASDAQ That the Company Is No Longer Subject to a Possi...

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>