By Christoph Steitz
FRANKFURT (Reuters) - German utility Innogy (DE:IGY) took a 480 million euro (426.20 million pounds) goodwill charge on its npower business on Monday, cutting the value of the British unit by 10 percent due to competition and regulatory headwinds.
The move comes less than a week after Innogy announced plans to fold npower into a UK retail joint venture with rival SSE (L:SSE).
Innogy said the planned tie-up did not impact its assessment of the impairment charge.
"The competitive landscape in the UK retail business remains very tough and pressure on margins is very high," Innogy said on Monday.
Top UK utilities face increased competition from smaller providers and a looming retail energy price cap proposed by the government.
Plagued by fierce competition and billing issues for years, npower reported a nine-month adjusted loss before interest and tax of 102 million euros, wider than the 81 million euro loss a year earlier.
"The UK retail business has been a well known drag and it is positive that Innogy tackles this problem," a trader said.
Monday's impairment cut npower's goodwill by 23 percent and gives the unit a value of 4.08 billion euros.
Shares in Innogy were down 0.6 percent at 0820 GMT.
The shares have gained 15 percent since the unit was carved out of utility RWE (DE:RWEG).
Npower added 47,000 customers in the third quarter, the group said, but cautioned that some customers could be retained only by offering cheaper contracts, further eroding margins.
Its end-September total of 4.804 million UK electricity and gas customers was down 2.4 percent from the end of 2016.
Britain is the second-largest market for Innogy, Germany's biggest utility by market value.
Innogy reported an 8.7-percent increase in nine-month adjusted EBIT to 2.00 billion euros, in line with the 1.99 billion euros expected by analysts in a Reuters poll.
