RWE sees profits falling this year after strong 2023

RWE left its guidance unchanged in pointing to a falling operating profit this year after the German utility confirmed a strong rise in earnings last year.

The company still sees adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) to come in between €5.2bn ($5.7bn) and €5.8bn in 2024 despite a significant drop in power prices since the outlook was given during RWE’s capital market day in November.

But the utility now expects a figure at the lower end of the range.

The same applies to adjusted net income of the company’s core business (which excludes nuclear and coal), which RWE anticipates will amount to between €1.9 and €2.4bn.

“Due to the recent significant drop in power prices on the European wholesale markets, we expect a figure at the lower end of the forecast range. We stick to the planned increase in our dividend: this is set to rise to €1.10 per share for fiscal 2024.”

Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) rose to €8.38bn in 2023, from €6.31bn in 2022. Adjusted net income rose to €4.54bn last year, from €3.25bn a year earlier.

“RWE looks back on a successful fiscal 2023. We achieved very good earnings, significantly expanded our green portfolio and at the same time substantially reduced our CO2 emissions,” CEO Markus Krebber said.

“We are resolutely pursuing our ‘Growing Green’ strategy: another 100 projects with a total capacity of more than 8GW are already under construction.”

Newly commissioned capacity in offshore wind has pushed adjusted Ebitda in the segment higher to €1.66bn last year, from €1.41bn a year earlier, according to the preliminary results. More favourable wind conditions also help, especially at RWE’s UK sites.

In onshore wind and solar, adjusted Ebitda in 2023 rose to €1.25bn, from €827m in 2022, mainly due to the new business resulting from the acquisition of Con Edison Clean Energy Businesses in the US that were fully consolidated as of 1 March 2023.

The commissioning of new wind and solar farms, as well as batteries, also helped, and compensated for lower electricity prices.

Adjusted Ebitda in the hydro, biomass and gas segment also rose, to €3.19bn last year, from €2.37bn a year earlier, while adjusted Ebitda in supply and trading went up to €1.58bn, from €1.16bn in 2022, which had been negatively impacted by sanctions on Russian coal.

Earnings only fell in the coal and nuclear business that is being phased out, with adjusted Ebitda declining to €705m in 2023, from €751m in 2022.