* Sees adj EBITDA of 4.4 bln eur in 2017, lower end of range
* Proposes 2016 div of 1.60 eur/shr vs 1.58 eur Rtrs poll
* Parent RWE would receive 683 mln eur based on plans
* Innogy says loss at Npower narrowed in 2016
(Recasts, adds context on retail markets, trader quote)
By Christoph Steitz and Tom Käckenhoff
ESSEN, Germany, March 13 German energy group
Innogy proposed a dividend payout at the top of its
target range, in a boon for struggling parent RWE,
even as it said it lost 300,000 customers in Britain and the
Netherlands last year.
Innogy, which is RWE's healthy renewables, networks and
retail divisions and was listed last year, proposed a dividend
of 1.60 euros per share on Monday, marginally above a Reuters
poll forecast of 1.58 euros.
That means RWE, with its 76.8 percent stake, would receive
683 million euros ($729 million) in payouts, cash it badly needs
after impairments on its power plants triggered the largest loss
in its 119-year history.
Shares in Innogy, however, slipped 0.3 percent and those of
RWE were down 0.7 percent, after Innogy said it expects core
earnings (adjusted EBITDA) of 4.4 billion euros this year, the
lower end of a previous target range of 4.3 bln-4.7 bln.
The company, Germany's biggest energy group, announced a 7
percent drop in adjusted EBITDA for 2016 to 4.20 billion euros,
although that was slightly better than a Reuters poll forecast
of 4.17 billion euros.
Strong competition in the British and Dutch markets is
making it hard for Innogy to retain customers there while
"We are accepting customers losses," Innogy Chief Executive
Peter Terium said, referring to the Dutch retail market where
rivals are snatching customers at ultra-low margins.
Terium said Innogy also continued to face challenges in the
UK retail market, where the cartel office (CMA) has capped some
power tariffs. However, it narrowed its operating loss at its
British unit Npower to 109 million euros in 2016 from 137
million a year earlier, as a restructuring programme at the
group had started to bear fruit.
It expects to turn an operating profit at Npower this year,
Innogy sees growing competition in key areas of its overall
business, including renewables, where bid-based tender systems
have replaced incentive schemes to lower the cost for solar and
It said its adjusted net income, the source of its dividend,
should top 1.2 billion euros this year, up from 1.12 billion in
2016, but below a Reuters poll forecast for 1.3 billion euros.
"The slightly disappointing outlook for net income is a
burdening factor, because that's what's determining future
dividends," said a trader.
The proposed 2016 dividend represents a payout ratio of 79
percent, the upper end of the company's 70-80 percent target
range, which Innogy confirmed.
($1 = 0.9372 euros)
(Additional reporting by Vera Eckert and Hakan Ersen; Editing
by Vyas Mohan and Susan Fenton)