- Workforce grows by 880 since the end of last year
- Operating result improves by 5% in the first quarter
- RWE confirms earnings targets for 2009
- CAPEX up 30% year on year
The RWE Group has made a successful start to fiscal year 2009. In the first quarter, the Group increased its operating result by 5%. Recurrent net income rose by 6%. The primary reason for this growth was unusually high earnings from the trading business and gas midstream activities of RWE Supply & Trading.
With effect from 1 July 2009, RWE will be reducing its gas prices for German residential customers for the third time this year. They can look forward to price cuts of up to 15%, as RWE quickly passes on the benefits of lower procurement costs to its customers. Together with the price reductions of 1 January and 1 April, this represents a total price cut of about one third since the end of 2008. It means that a single family household with an average annual consumption of 20,000 kilowatt hours will save up to €450 per annum on gas costs.
The positive trend in RWE customer numbers continues. In the second half of 2008, RWE had already achieved a net customer gain of around 80,000 and in the first quarter of the new fiscal year again, the retail team has managed to add another 30,000 residential electricity customers in Germany.
The RWE Group intends to complete its takeover of Dutch energy utility Essent within the third quarter of the year. RWE's overall investment programme of €26 billion through 2012 remains on track.
Residential electricity business stable while industrial business declines
Due to the rise in customer numbers, electricity sales to residential customers increased slightly. Industrial customer business, on the other hand, was affected by the general decline in production triggered by the economic downturn. RWE was able to keep gas sales in the first quarter of this year at the level of the same period last year. Overall, the company's electricity and gas sales benefited from the cool weather conditions in the first quarter of 2009 compared with the same quarter last year.
External revenue 8% up year on year
The RWE Group generated external revenue of €14.5 billion in the first quarter of 2009, or 8% more than in the same period of 2008. Adjusted for currency effects, Group revenue rose by 12%.
Operating result up 5% on prior year period
The RWE Group continued to improve its earnings in the first quarter of 2009 compared to the previous year's period. EBITDA rose by 5% to €3.1 billion and the operating result also improved by 5% to €2.6 billion. The main reason for this growth was the unusually high earnings contribution from RWE Supply & Trading, which however cannot be extrapolated to the year as a whole.
Recurrent net income 6% higher
In the first quarter of 2009, recurrent net income of the RWE Group was €1.5 billion – making it 6% higher than in the same period of 2008. Recurrent net income, or net income adjusted to exclude one-off effects, is the key determinant of RWE's dividend.
Capital expenditure increased by 30%
RWE is implementing the largest investment programme in its history, despite the global financial and economic crisis. In the first quarter, the Group invested €2.1 billion, three times as much as in the same period last year. Capital expenditure on property, plant and equipment rose by 30% to €853 million. All divisions within the Group recorded increases in this area.
RWE Power accounted for over 40% of capital expenditure on property, plant and equipment. RWE Innogy is also experiencing a dynamic trend in CAPEX. The key focus is on wind power projects like the 90-megawatt Rhyl Flats offshore wind farm currently under construction in the United Kingdom. The UK subsidiary, RWE npower is preparing for the construction of a 2,000-megawatt combined cycle gas turbine power plant (CCGT) located in Pembroke. A further 1,650-megawatt CCGT power plant is currently being built in Staythorpe.
As of 31 March 2009, the RWE Group employed 66,786 staff, 60% of whom worked in Germany. Compared with 31 December 2008, the number of employees in Germany rose by 492. Group-wide, 878 or 1.3% more staff were on the payroll. With the exception of RWE Energy, all divisions within the Group increased the size of their workforce.
Outlook for 2009
Despite the unfavourable economic trend in Europe, RWE still expects to post a successful fiscal year 2009.
The Group expects that external revenue for 2009 will match the level of the previous year. The repercussions of the worldwide financial and economic crisis will have a relatively minor effect on its operating business. Although electricity consumption is decreasing, the forward sales of our generation output in the preceding years at higher prices than currently traded is having a positive effect. RWE is anticipating that EBITDA will be of the order of last year’s level. The same applies for the operating result and recurrent net income.
This press release contains forward-looking statements regarding the future development of the RWE Group and its companies as well as economic and political developments. These statements are assessments that we have made based on information available to us at the time this document was prepared. In the event that the underlying assumptions do not materialise or additional risks arise, actual performance can deviate from the performance expected at present. Therefore, we cannot assume responsibility for the correctness of these statements.