RWE hit all of its operating targets in 2018, despite the challenging conditions. At the same time, good progress is being made with the transaction with E.ON, which will see RWE take over the renewables operations of E.ON and innogy. The European Commission granted its approval for the transaction at the end of February, without any conditions.
On the same day, the German Federal Cartel Office gave clearance to the acquisition of a 16.7% interest in E.ON. Other parts of the transaction that should be completed in the second half of 2019 include the transfer of E.ON’s minority interests in the Emsland and Gundremmingen nuclear power plants, which are operated by RWE, innogy’s gas storage business and its stake in the Austrian power utility Kelag.
In the past year, on a stand-alone basis RWE generated adjusted EBITDA (earnings before interest, taxes and depreciation and amortisation) of €1.5 billion (previous year: €2.1 billion). The forecast was between €1.4 - €1.7 billion. For ‘RWE stand-alone’, adjusted net income amounted to €591 million (compared to €973 million in the prior-year period). Here again, the forecast of €500 - €800 million was clearly achieved. Both figures were lower than the results registered for the previous year, mainly due to the anticipated decline in wholesale electricity prices. The efficiency-enhancement programme in conventional power generation had an opposite effect. By the end of 2018, RWE had already nearly completely achieved its goal of reducing its cost base by €300 million annually by 2019 compared to 2016.
The Executive Board and the Supervisory Board of RWE AG will propose to the AGM on 3 May an increased ordinary dividend of €0.70 for common and preferred shares for fiscal 2018. Another increase in the dividend is planned in 2019 to €0.80 per share.
For the current fiscal year, RWE projects adjusted EBITDA in a range of €1.2 - €1.5 billion and adjusted net income between €300 - €600 million. While a mild recovery can be seen in electricity prices, this will be offset by the negative effects of legal decisions in relation to Hambach Forest and the UK capacity market.
European Power: lower margins for hard coal and gas
For the past fiscal year, adjusted EBITDA of the European Power division amounted to €334 million (previous year: €463 million). A figure between €300 - €400 million had been forecast. One positive effect was the payments from the UK capacity market, but due to the ruling of the General Court of the Court of Justice of the European Union in November 2018, only €50 million was received, instead of the planned €100 million. The European Commission has appealed the ruling, which suspended the capacity market. Margins for electricity generated from gas and hard coal were lower, and an extraordinary effect from capital gains on property sales in 2017 did not recur in 2018.
“2019 is an exciting year for RWE, as we prepare to integrate the renewables divisions of innogy and E.ON into a single organisation at RWE. At the same time, we want to keep the profitability of our operations in conventional generation stable. In view of the variety of challenges, this won’t be an easy feat, but we are approaching it with great confidence and enthusiasm,” said Dr. Markus Krebber, CFO of RWE AG.
To read the full report: https://news.rwe.com/en/performance-fiscal-2018/
Read the article online at: https://www.worldcoal.com/coal/14032019/rwe-hits-targets-for-2018/