SSE Share News (SSE)

(Sharecast News) - Low winds across Europe buffeted profits at Innogy last year, as the German owner of Npower warned that earnings in the current year would be "significantly" lower.Adjusted earnings before income and tax in 2018 fell to €2.63bn from €2.82bn, while adjusted net income came in at €1.03bn, compared to €1.22bn a year earlier.Innogy, which specialises in renewables, said it had expanded into new markets and launched new projects during the year. But it said this had been "overshadowed by unusually low wind levels across large areas of Europe, which had a negative impact on the result".Chief financial officer Bernhard Günther said: "We unfortunately did not achieve our goal of combining our UK retail business with that of SSE, and that will have a negative impact on our result in 2019 as well."Year-long talks to combine Npower, Innogy's loss-making British business, with Scotland's SSE collapsed in December. It is understood the two sides were unable to agree terms after the price cap on standard variable tariffs was introduced by regulators."All-in-all, we face challenges in our European electricity and gas retail business. But by establishing new collaborative arrangements and expanding our online business, we were able to secure our competitive position," said Günther.Innogy is forecasting adjusted EBIT of around €2.3bn for 2019, "down significantly on the previous year", and adjusted net income of around €850m. The main reasons for the falls are the sale of its Czech gas grid business to RWE in February 2019, and the price cap and higher regulatory costs in the UK.Outside the UK, "intense competition and the rise in wholesale prices for electricity and gas" were also expected to weigh on earnings.Last year, RWE - which has a controlling stake in Innogy - announced a landmark €40bn deal with German rival E.ON. Under the terms of the deal, E.ON will take over Innogy and there will be a series of asset swaps between the E.ON and RWE that will leave E.ON focused on regulated energy networks and retail. RWE will become a leading energy producer and the owner of the renewable assets of both E.ON and Innogy.Innogy chief executive Uwe Tigges said: "2018 was a very turbulent year for Innogy. The transaction announced by E.ON and RWE caught us by surprise, and for our employees it was anything for good news. We succeeded in concluding agreements with both E.ON and RWE on the integration of our business activities into both groups that took account of the interests of our employees, investors, customers and other stakeholders."But our key focus is of course on further developing our operational business: we are rigorously driving our strategy forward, and are bolstering our position in an increasingly competitive market environment."