By Tom Käckenhoff, Christoph Steitz and Vera Eckert
FRANKFURT (Reuters) - Germany's RWE could consider pulling out of Britain if it can't find a way to turn around its Npower business, which has suffered a rapid loss of customers, its chief financial officer told Reuters.
RWE is facing the biggest crisis in its 117-year history, grappling with ultra-low wholesale power prices, high exposure to coal and gas and only a small presence in renewables. Its shares are trading around a 24-year low.
Bernhard Guenther, RWE's CFO since 2013, said in the interview it would take at least until 2017 for Npower to return to profit from an expected mid double-digit million-euro loss this year. Investors have questioned whether it is worth keeping.
"We're not categorically ruling out adjusting our portfolio of countries," Guenther said in an interview, when asked whether RWE would choose to sell Npower at some point.
"But such a decision would also prompt the question: are we the better owner or is someone else?"
Tougher competition has seen RWE lose about 200,000 customers in Britain in the first nine months of the year compared with 100,000 just for the first half, it said last week, sending its shares down 10 percent.
It now has 5.4 million customers in the UK but a problem with its billing process has meant it has been effectively unable to charge some customers and it does not expect the issues to be resolved until the end of 2016.
JOB CUTS LOOM
Guenther said in the interview the company was aiming to come up with a plan for how to fix the unit by next March and to bring down its losses in 2016 compared with 2015.
He said that Npower's billing problems were triggered by the implementation of new software that brought to light bad data quality, causing RWE to issue faulty bills or send them to the wrong people.
"There were clients that were no longer with us and existing ones that were not registered by the system and didn't get bills," he said.
Guenther added there was room to improve Npower's profitability through other measures.
"There are too many employees when compared with customers and profitability."
RWE Npower, which employs about 7,000, is among the big six UK household power and gas suppliers - including EDF (PA:EDF) Energy, E.ON, Centrica's British Gas, Scottish Power and SSE (L:SSE) - which have dominated the market for decades and still control more than 85 percent.
But the UK retail market for power and gas is in flux as customers are disenchanted with faceless and expensive large suppliers, turning to smaller new and local firms or aggregators who also sell other services like telecoms.
Local regulator Ofgem is favouring competition, requiring suppliers to give more data on bills to improve the scope for supplier switches and give consumers more transparency and choices.
"The British retail business carries a great risk of regulatory interference," Guenther said.
RWE's retail units in Germany, the Netherlands and eastern Europe are profitable.