RWE Advances Growing Green Ambitions: Expands Renewable Energy Holdings and Achieves Strong Q1 Performance

(IN BRIEF) RWE, the European energy company, is rapidly implementing its Growing Green strategy with substantial investments in the first quarter of 2023. The company added 4.9 GW to its green portfolio, spending €8.0 billion on acquisitions, including the Con Edison Clean Energy Businesses in the US. RWE also invested in wind and solar facilities, commissioned new plants, and acquired a hydrogen-ready power station and a solar developer. Construction is underway for additional facilities totaling 6.8 GW. RWE reported strong Q1 results, with adjusted EBITDA of €2.8 billion and adjusted net income of €1.7 billion. The company confirms its fiscal year outlook and dividend target.

(PRESS RELEASE) ESSEN, 11-May-2023 — /EuropaWire/ — RWE AG (ETR: RWE), a German multinational energy company, is making rapid progress in implementing its Growing Green strategy. In the first quarter of 2023, the company expanded its green portfolio by 4.9 gigawatts (GW) through investments totaling €8.0 billion. The notable acquisition of Con Edison Clean Energy Businesses in the US accounted for the largest share of these investments, amounting to €6.3 billion. Additionally, RWE acquired a hydrogen-ready gas-fired power station in the Netherlands and acquired British solar developer JBM Solar. The company also made significant investments in new wind and solar facilities and commissioned several plants. Compared to the first quarter of 2022, RWE’s green portfolio grew impressively by 7 GW.

Furthermore, RWE has ongoing construction projects for additional facilities with a combined capacity of 6.8 GW. Notably, the largest individual projects include the 1.4 GW offshore wind farm Sofia off the UK coast and the 1 GW Thor wind farm in Denmark. Onshore, RWE is actively expanding its wind power capacity with over 17 projects totaling 0.6 GW across Europe and the US. Solar energy constitutes the largest share of RWE’s new-build projects, with 2.7 GW primarily located in the US. Additionally, RWE is expanding its global battery storage portfolio with projects totaling 0.9 GW currently under construction in Germany, the US, and the Netherlands.

Michael Müller, Chief Financial Officer of RWE AG: “The continuous construction of new renewable energy facilities and our acquisitions are paying off. In the first quarter of 2023, we generated 14% more green electricity than in the same period last year. And we have the financial resources to continue investing strongly in organic growth this year. Our project pipeline is well filled, and the forthcoming auctions open up further attractive opportunities for us.”

RWE achieved strong financial results in the first quarter of 2023, with an adjusted EBITDA of €2.8 billion at the Group level and €2.3 billion in its core business. These figures represent substantial year-on-year growth, and adjusted net income rose to €1.7 billion.

The increase in earnings is primarily attributed to higher international power generation earnings in the Hydro/Biomass/Gas segment. Furthermore, the previous year’s earnings were impacted by charges resulting from sanctions on hard coal from Russia in the Supply & Trading segment. The addition of renewable energy generation capacities also contributed significantly to the positive financial performance.

RWE confirms its outlook for the fiscal year 2023 as a whole and maintains the dividend target of €1.00 per share for the current fiscal year.

Business Performance in Q1 2023: Segment Highlights and Solid Financial Outlook

Offshore Wind: The Offshore Wind segment reported an adjusted EBITDA of €473 million, up from €420 million in Q1 2022. This growth is primarily attributed to the commissioning of new capacities, including the Triton Knoll wind farm and Kaskasi off the island of Heligoland.

Onshore Wind/Solar: The Onshore Wind/Solar segment recorded an adjusted EBITDA of €247 million, compared to €318 million in Q1 2022. The decline is primarily due to lower electricity prices. However, additional earnings were recognized from the acquisition of Con Edison Clean Energy Businesses in the US and the commissioning of new wind and solar farms.

Hydro/Biomass/Gas: The Hydro/Biomass/Gas segment experienced a significant increase in adjusted EBITDA, reaching €1,177 million in Q1 2023 compared to €263 million in the previous year. This growth is primarily driven by higher earnings from the dispatch optimization of the international generation portfolio and improved generation margins.

Supply & Trading: The Supply & Trading segment achieved an outstanding adjusted EBITDA of €289 million, a substantial increase from the previous year’s figure of -€550 million. This improvement is attributed to exceptional trading performance, in contrast to the negative impact of coal delivery sanctions from Russia in Q1 2022.

Coal/Nuclear: The Coal/Nuclear segment reported an adjusted EBITDA of €496 million, compared to €207 million year-on-year. The growth is primarily due to higher margins resulting from forward-selling electricity at higher prices. Additionally, earnings were contributed by the Emsland nuclear power plant until its shutdown on April 15, 2023.

Solid Financial Situation: RWE maintains a robust financial position despite significant investment activity. As of March 31, 2023, the company reported net debt of €5.7 billion. RWE expects its leverage factor, the ratio of net debt to adjusted EBITDA, to remain well below 3.0, which is the company’s upper limit.

Key figures at a glance

*Some prior-year figures restated, as in particular the impairment of around €850 million on contracts relating to hard coal purchases from Russia was initially considered in the non-operating result in the first quarter of 2022. This effect is now recognised in adjusted EBITDA.