RWE unveils cautious outlook for 2023

German power major RWE AG (ETR:RWE) projects a decline in its adjusted core earnings and net profit in 2023 as UK and European revenue caps are expected to dent the performance and the trading unit is unlikely to repeat the strong results from 2022.

Adjusted net income is seen in the range of EUR 2.2 billion to EUR 2.7 billion (USD 2.91bn) after more than doubling to EUR 3.2 billion in 2022. The forecast was disclosed in RWE's annual report which confirmed the group's preliminary figures for 2022.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in the core business, which includes renewable energy operations and supply and trading, are expected to decline to between EUR 4.8 billion and EUR 5.4 billion from EUR 5.56 billion in 2022.

The lower projections are based on the expectation that revenue caps could cause earnings shortfalls. In addition, earnings in the supply and trading unit are forecast in the range of EUR 300 million and EUR 600 million, which is far below the high level seen in 2022 when they came in at EUR 1.16 billion.

In 2023, the Essen-based group plans to invest more than in the prior year when net cash investments totalled EUR 4.4 billion and more than 30 projects with a combined capacity of 2.4 GW were put into operation. Currently, the construction of projects with a total capacity of 6 GW is underway.

(EUR 1 = USD 1.078)

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