RWE looks to 2019 to complete transformation

Frankfurt am Main (AFP) –


German energy giant RWE reported Thursday falling profits in 2018, but said this year should bring completion of a massive deal sealed that will see it buy up the renewable and nuclear activities from its rival EON.

Essen-based RWE made adjusted net profits of 591 million euros ($669.3 million) last year, down from 973 million in 2017.

While operating, or underlying profits also fell, to 1.5 billion euros, the group said the slimmer result was within its target range.

Weaker profits were "mainly due to the anticipated decline in wholesale electricity prices," the group said.

Sales also fell as RWE shut down a nuclear reactor at its plant in Gundremmingen, part of Berlin's plan for a gradual exit from atomic energy by 2022.

And coal-fired power plants could face a shorter future, after an expert commission recommended stopping use of the fuel by 2038 at the latest -- a date that could be brought forward to 2035 as Germany scrambles to meet targets for reducing carbon dioxide emissions.

Nevertheless, "our operating business is performing according to plan and we have a very good financial basis," chief executive Rolf Martin Schmitz said in a statement.

RWE will offer investors a dividend of 70 euro cents per share for 2018, and targets a 2019 payout of 80 cents.

This year should bring the completion of a massive exchange of assets with competitor EON, which will see RWE take over renewable energy generation from its rival and its own former spin-off innogy, while EON focuses on networks and distribution.

Meanwhile the group hopes for "stable" profitability in its traditional electricity businesses.

Across all of RWE, bosses are targeting operating profits of between 1.2 and 1.5 billion euros, with net profits of between 300 and 600 million.

Rising electricity prices should help nudge the result in the right direction, but the group could also face costs from a court decision preventing it from expanding an open-cast mine in Hambach forest near Cologne.