RWE 1H Profits Tumble

RWE said August 14 it continued its positive business performance in first half 2018, yet its net profit was down by 94% year on year at €162mn ($185mn). It is meanwhile divesting a Belgian gas-fired plant.

Because of its plan to divest 76.8%-owned affiliate Innogy to E.ON, RWE said its 1H results were “ only of limited informational value” and that the focus rests on the key figures for ‘RWE standalone’ from now on: lignite & nuclear, European power, and Supply & Trading; nonetheless its 1H adjusted earnings (Ebitda) were 27% lower year on year at €825mn ($940mn)

The latter included European power, where Ebitda was 12% lower at €196mn, because margins at gas and coal-fired power stations were slightly lower year on year; and Supply & Trading (RWEST), down 23% at €101mn where nonetheless RWE said its energy trading performance improved significantly year on year although its gas business failed to match very high 1H2017 earnings. In mid-2017 RWE combined management of its gas portfolio and LNG business into a new unit within RWEST.

RWE’s power generation in 1H2018 was down 17% at 87.9 terawatt-hours (TWh); it disclosed no gas sales figure. It did though report agreement in June to sell a gas-fired 133 MW combined heat and power plant (CHP) near Antwerp, Belgium to UK firm Ineos without citing the sale price.

RWE's major deal with E.ON – announced March - will see E.ON transfer its renewables business, such that “RWE will become Europe’s No. 3 in renewables.” But the latter will remain heavily coal-focused.

It is lobbying to be compensated by the Netherlands government, if a planned phase out of all coal-fired plants there by 2030 goes ahead, stating it may “take legal recourse...if necessary.” Under the draft Dutch law, RWE said its 643 MW Amer-9 unit would have to shut 2024 and its newer 1,554 MW Eemshaven plant by 2029. Plans to phase out coal in Germany are far less advanced, perhaps because the government was successfully sued by RWE, E.ON and Vattenfall for losses over the early phase out of nuclear enacted in 2011 and due to be fully implemented in 2022.

Following two early 2018 capacity auctions, RWE will secure payments for 6.6 GW of its UK generation capacity (mostly gas) in 2021-22 but said the average £8.40/kW payment was “below expectations”.