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Transformed RWE unveils 20-GW pipeline, lifts profit guidance for 2019

North Hoyle offshore wind farm in UK. Author: Ingy The Wingy. License: Creative Commons.

November 15 (Renewables Now) - German energy group RWE AG (ETR:RWE) on Thursday upgraded its standalone forecast for 2019 and announced a growing renewables pipeline of 20 GW.

Following the asset and share swap deal with E.on SE (ETR:EOAN), the Essen-based company is shifting its focus on renewables and is now describing itself as “Europe’s No 3 in renewable energy” with a pipeline of projects of 20 GW. The new unit RWE Renewables has a portfolio of over 9 GW and 2.6 GW under construction.

The energy group, which recently unveiled a goal to achieve carbon neutrality by 2040, intends to further expand that portfolio with up to EUR 1.5 billion (USD 1.65bn) in net investments per year.

The new RWE structure is not “fully reflected” in the company’s consolidated income statement. On Thursday it provided details on its standalone results and forecast, excluding Innogy and E.on renewables assets.

RWE lifted its standalone adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) outlook for 2019 to EUR 1.8 billion - 2.1 billion from EUR 1.4 billion-1.7 billion and said it now sees its standalone adjusted net profit for the year at between EUR 900 million and EUR 1.2 billion, up from EUR 500 million-800 million previously.

The upgraded forecast comes as a result of the reinstatement of the British capacity market, which will have a positive impact on the earnings of its European Power segment, and the continued strong trading performance in the first nine months of the year.

The adjusted EBITDA forecast for the company’s separate segments was also increased, as shown in the table below. The dividend target for 2019, meanwhile, was confirmed to be EUR 0.80 per share.

Adjusted EBITDA 2019 forecast (in EUR) New Old
Lignite & Nuclear segment 300m-400m N/A
European Power segment 450m-550m 250m-350m
Supply & Trading segment 300m+ N/A
Total adjusted EBITDA 1.8bn-2.1bn 1.4bn-1.7bn

“RWE is profitable in operating terms and we have a very solid equity base. Our finances have put us back in a position to achieve growth – above all in the renewable energy business where we have formidable prospects,” said chief financial officer Markus Krebber.

RWE closed the first nine months of 2019 with a standalone adjusted net profit of EUR 854 million, rising from EUR 645 million a year before, and adjusted EBITDA expanding from EUR 1.3 billion to EUR 1.5 billion. The standalone EBITDA result for the period does not include the contribution from operations purchased from E.on.

More details on stand-alone financial performance can be seen in the table below.

Figures in EUR Jan-Sep 2019 Jan-Sep 2018
Adjusted EBITDA 1.5bn 1.3bn
-- from Lignite & Nuclear segment 231m 240m
-- from European Power segment 130m 234m
-- from Supply & Trading segment 545m 183m
Adjusted net profit 854m 645m

The results of Innogy, which encompasses RWE’s renewables business before the E.on deal, are reported as continuing operations. The unit generated adjusted EBITDA of EUR 583 million in January-September, up from EUR 488 million a year back, while internal revenue inched up to EUR 282 million from EUR 271 million.

(EUR 1.0 = USD 1.102)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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