Rough Sailings for RWE: Windy Woes Dent Q1 Earnings
RWE experiences financial setbacks
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Germany's energy powerhouse, RWE, is battling a sluggish start this year, primarily in its renewable energy sector. Consequently, its earnings are taking a beating as winds of change bring a series of challenges. Nevertheless, the company stays steadfast, ready to meet its yearly objectives. Shareholders should anticipate a stock dividend hike for the preceding year.
RWE's Q1 profits took a nosedive, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) slipping to 1.3 billion euros from 1.7 billion euros in the same period last year. The company blames poor wind conditions and other factors for this downward trend in the renewable energy division.
In the offshore wind segment, RWE reported a drastic drop in adjusted EBITDA from 548 million to 380 million euros. Interestingly, the onshore wind/solar segment witnessed a profit boost due to the commissioning of new facilities. The energy trading segment suffered a massive loss, plummeting to 15 million euros from a robust 251 million euros in the previous year. RWE's adjusted net profit attributable to shareholders also showed a noticeable decrease, dipping from 801 million to 498 million euros.
Despite these setbacks, RWE reaffirms its full-year guidance, projecting adjusted EBITDA ranging between 4.6 billion and 5.2 billion euros. Their adjusted net result is still projected to be between 1.3 billion and 1.8 billion euros. The company intends to increase its dividend by 10 cents to 1.20 euros. However, the expanding share buyback program prior to May 2026 remains off the table, as reported by their CFO, Michael Müller.
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RWE is continuing to expand its portfolio, having put 600 megawatts of new energy sources online in the first quarter this year, as reported by CFO Michael Müller. The company's ongoing projects are proceeding as planned and within budget. "This year and next, we are set to complete plants with a total capacity of eight gigawatts, including our large offshore wind farm, Sofia, in the UK," Müller stated.
RWE has its eyes on the federal government’s planned tender for gas power plants. "We're prepared to construct at least three gigawatts if the circumstances align," Müller expressed. Germany's Federal Economics Minister Katharina Reiche recently announced intentions to tender "at least 20 gigawatts" of gas power plants to ensure the country's energy security.
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RWE plans to capitalize on existing power plant sites, with detailed plans already in place at Weisweiler near Aachen and Voerde near Wesel. The company is also gearing up for concrete projects at other sites, including Grundremmingen. RWE has already secured turbines for a total of 2.4 gigawatts through forward contracts. Specifically, this entails three combined cycle gas turbine (CCGT) plants, each with a capacity of 800 megawatts.
Sources:
- ntv.de
- jwu/rts/DJ
[1] Poor wind conditions in Europe led to lower electricity production from both onshore and offshore wind farms during Q1 2025, contributing to reduced earnings.
[2] RWE reported a decline in operating profit, with adjusted EBITDA falling by 23.5% to €1.3 billion in the first quarter of 2025. Partly attributable to weak trading results and poor wind conditions affecting offshore wind operations.
[3] Despite these challenges, the company confirmed its 2025 outlook and noted positive impacts from the commissioning of new wind and solar farms.
[4] Q1 2025 saw significant drops in the offshore wind (548 million to 380 million euros) and energy trading segments (251 million to 15 million euros) profits. The onshore wind/solar segment, however, showed an increase in profits.
[5] RWE plans to unveil three combined cycle gas turbine (CCGT) plants, each with a capacity of 800 megawatts, as part of its seven gigawatts expansions. These plants are projected to come online by 2026 and 2027.
- The decrease in RWE's Q1 profits, partly due to poor wind conditions, showcases the challenges experienced in the renewable energy industry, particularly within the offshore wind sector.
- Despite the setbacks in Q1, RWE remains committed to its yearly guidance, anticipating higher profits from its renewable energy division, expansions in the gas sector, and a dividend hike for shareholders.
