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Axpo to axe 140 staff as profits slump

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11:08 CET+01:00

Top Swiss energy company Axpo Group has reported a significant decline in profits in the last financial year, resulting in a dramatic need to restructure.

The Axpo Group reported on Monday that operating profit has dropped from 538 million francs ($576 million) in the 2009/2010 financial year to just 139 million francs last year, while consolidated net profit has dropped from 409 million francs to just 45 million francs.

The decline is being blamed in part on the instability of the financial markets, the impact of the Fukushima accident, rising costs incurred by the decommissioning and dismantling of nuclear power plants, as well as those incurred by changes in regulation.

The company has announced that it will cut up to 140 positions from March 2012. Some of the cuts in jobs will be achieved by implementing a policy of not replacing employees whose contracts have expired or who are due for retirement. Nevertheless, a certain proportion of the companies’ workers will also need to be made redundant.

Axpo has estimated that it needs to invest 21 billion francs between now and 2030 in order for it to ensure its supply of environmentally friendly electricity. In order to achieve its objective, the company will have to carry out major cost-saving initiatives as well as significant restructuring. This initial phase of restructuring is expected to save the company approximately 100 million francs.

In particular, Axpo reports that it may have to rely not only on domestically produced electricity, but also on imported supplies. Existing organisational structures will need to be optimized and it is envisaged that trading activities between companies EGL AG and Axpo AG will be merged, as will several other parts of the business.

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