German energy group Innogy has reported a €480m goodwill impairment charge on its British retail business it plans to merge with that of peer SSE, which owns Airtricity here.
Both firms last week said they were planning to combine their local supply units in Britain, responding to dwindling customer numbers and a looming retail energy price cap proposed by the government.
"The competitive landscape in the UK retail business remains very tough and pressure on margins is very high," Innogy said in a statement.
It addied that the charge reflected worse commercial assumptions and tougher regulatory conditions.
Innogy's British retail business, Npower, has been plagued by fierce competition and billing issues for years.
Today it reported a nine-month adjusted loss before interest and tax at €102m, compared with €81m the same time last year.
Npower still managed to add 47,000 customers in the third quarter, the group said, but cautioned that some customers could be retained only by offering cheaper contracts, further pressuring earnings.
For the group as a whole, Innogy, Germany's largest energy firm by market value, reported an 8.7% increase in nine-month adjusted EBIT to €2 billion, in line with the €1.99 billion analyst estimate in a Reuters poll.