RWE Raises Earnings Outlook for 2023 on Strong First-Half Performance in International Power Generation

RWE Raises Earnings Outlook for 2023 on Strong First-Half Performance in International Power Generation

(IN BRIEF) RWE, a German energy company, has raised its earnings forecast for fiscal year 2023 based on strong operational performance in the first half of the year. The increase in earnings is primarily attributed to international power generation in the Hydro/Biomass/Gas segment and strong performance in Supply & Trading. RWE now expects its adjusted EBITDA at the Group level to be between €7.1 billion and €7.7 billion, and adjusted EBITDA in the core business to be between €6.3 billion and €6.9 billion for the current fiscal year. Despite weaker performance in the German lignite and nuclear business, the company confirms its dividend target of €1.00 per share for 2023.

(PRESS RELEASE) ESSEN, 26-Jul-2023 — /EuropaWire/ — RWE has delivered a strong operational performance in the first six months of fiscal 2023. Based on preliminary figures, the company expects to close the first half of 2023 with adjusted EBITDA at Group level of €4.5 billion and adjusted EBITDA in the core business of €4.1 billion. Adjusted net income is expected to be €2.6 billion. The result for the first six months is thus significantly higher year-on-year.

The increase in earnings is mainly driven by international power generation in the Hydro/Biomass/Gas segment and a strong performance of Supply & Trading. In addition, the previous year’s earnings were impacted by charges from sanctions on hard coal from Russia in the Supply & Trading segment. Additional generation capacities based on renewable energies contributed to the strong result.

On the back of the extraordinarily strong first half year, RWE has raised its earnings forecast for the current fiscal year.

Michael Müller, CFO of RWE AG: “The development of our earnings in the first half of 2023 was marked by a very successful deployment of our international power plant portfolio and an exceptionally strong performance in energy trading, which exceeded our expectations. On the back of this, we have raised our forecast for 2023. We will continue to invest heavily in the energy transition, and we want our shareholders to have a fair share in our success. We confirm our dividend target of €1.00 per share for fiscal 2023.”

RWE’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) at Group level is now expected to be between €7.1 billion and €7.7 billion. For its core business, RWE now expects adjusted EBITDA to be between €6.3 billion and €6.9 billion. In line with the increase in adjusted EBITDA, adjusted EBIT at Group level is now expected to be between €5.0 billion and €5.6 billion in 2023. Adjusted net income is expected to reach €3.3 billion to €3.8 billion at year-end.

Outlook 2023 by segment and preliminary results for the first half of 2023

Offshore Wind: Adjusted EBITDA for the Offshore Wind segment in the first half of 2023 is expected to be €762 million, compared to €632 million in the prior year period. The increase in earnings is due to the commissioning of new capacity, the Kaskasi offshore wind farm off the coast of Heligoland and Triton Knoll off the UK coast. Wind volumes were below the level of the previous year and below the long-term average. The outlook for the full year has been confirmed.

Onshore Wind/Solar: Adjusted EBITDA in the Onshore Wind/Solar segment is expected to be €519 million in the first six months of 2023, compared to €505 million year-on-year. The increase in earnings is due to the acquisition of Con Edison Clean Energy Businesses in the US which has been fully consolidated since 1 March 2023, and the commissioning of other new wind and solar projects. By contrast, weaker wind conditions also had a negative impact. The full year outlook has been confirmed.

Hydro/Biomass/Gas: The Hydro/Biomass/Gas segment is expected to achieve an adjusted EBITDA of €1,939 million in the first half of 2023, compared to €755 million in the prior year period. This is mainly the result of higher earnings from short-term optimisation of the dispatch of the international generation portfolio and higher generation margins. The full year outlook for the adjusted EBITDA has been raised to €2,600 million to €3,000 million.

Supply & Trading: Adjusted EBITDA for the first six months of 2023 in the Supply & Trading segment is expected to increase to €799 million compared to €-203 million in the same period last year. The year-on-year increase in earnings is due to sanctions on coal deliveries from Russia, that led to an impairment of €748 million in the first half 2022. Therefore, the outlook now assumes the adjusted EBITDA for the full year to exceed significantly the upper end of the current forecast range.

Coal/Nuclear: The Coal/Nuclear segment is expected to reach an adjusted EBITDA of €431 million in the first half of 2023, compared to €501 million year-on-year. Due to a significantly lower electricity production based on lignite compared to the previous year and lower margins of unhedged positions, earnings were lower. In addition, power plant maintenance was carried out during the period under review. The contribution to earnings from nuclear energy was lower year-on-year, as the Emsland nuclear power plant only produced electricity until its shutdown on 15 April 2023.

Final figures for the first half of 2023 will be released as planned on 10 August 2023.

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SOURCE: RWE