'Investing billions' | RWE delivers promised profit and hits the accelerator for renewables
RWE had already unveiled earnings on a preliminary basis and focused on upbeat message on capacity build-up
Global power giant RWE has achieved the higher earnings it had already promised for the first half of 2023 as robust revenues from power generation in the hydro, biomass and gas segment, along with a buoyant trading business, helped the company to invest heavily in additional installed capacity in the renewables segment.
The company said higher power prices outweighed the impacts of weaker winds on its renewables fleet and expects adjusted net profit for the full year to come in at €3.3-€3.8bn.
Reporting full first-half earnings today (Thursday), RWE underlined its willingness to continue building capacity, spending €9bn on growth compared to €2.1bn in the same period last year, with acquisitions in new wind and solar plants. The company said another 7.2GW of capacity are currently under construction.
Growth highlights included the acquisition of Con Edison Clean Energy Businesses in the US for €6.3bn.
RWE said additional generational capacities based on renewable energies “also contributed to the good result”.
'Investing billions'
Markus Krebber, chief executive of RWE said: “We are investing billions of euros to drive forward the expansion of our sustainable portfolio. In the first six months of this year, we already invested €9bn and expanded our capacity by 5.1GW through acquisitions and the commissioning of new plants.
“Thanks to our good results and our very solid financial position, we can keep up this fast pace: We are currently constructing more than 70 renewable energy projects in 12 countries with a total capacity of over 7GW – that’s more than ever before.”
In terms of performance, RWE said adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) were €762m, up from €632m in the prior year period, as already stated on a preliminary basis.
New capacity incorporated
The increase in earnings was attributed to the commissioning of new capacity, the Kaskasi offshore wind farm off the coast of Heligoland and Triton Knoll off the UK coast which "more than compensated for the overall weaker wind conditions."
In the onshore wind and solar segment, the company reported an adjusted Ebitda of €519 million in the first six months of 2023, compared to €505 million in the first half of 2022. The company highlighted the acquisition of Con Edison Clean Energy Businesses in the US as well as the commissioning of new wind and solar projects.
Lower realised electricity prices and weaker wind conditions had a counteracting effect in onshore wind and solar.
For the hydro/biomass/gas segment, RWE reported an adjusted Ebitda of €1.94bn in the first half of 2023 compared to €755m in the prior-year period.
Overall, adjusted Ebitda increased to €4.5bn from €2.1bn on a yearly comparison, thanks to higher earnings in core business.
RWE said better-than-expected earnings development were boosted by the company's hydro/biomass/gas division, helping the company to improve its earnings guidance for the whole year.
"Given all the positive developments we increased our earnings guidance for 2023. We have updated group Ebitda guidance to €7.1 billion to €7.7 billion and for adjusted net income we have increased our guidance to €3.3 billion to €3.8 billion," Krebber told analysts in an earnings call.
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