- Operating result up 14% year on year
- Recurrent net income up 15%
- Essent makes large earnings contribution
- 2010 outlook confirmed
RWE made a good start to the 2010 fiscal year. The first quarter saw a 14% increase in operating result year on year, to €2.99 billion. Recurrent net income, the decisive figure for determining the dividend, rose by 15% to €1.74 billion.
The first-time consolidation of Essent had a positive effect. The Netherlands/Belgium division achieved an operating result of €281 million. In addition, RWE Power produced a good result and there were increased contributions from operations in the UK (€227 million) and in Central and Eastern Europe (€447 million). The Upstream Gas & Oil division also posted an increase (€128 million). However, as expected, Trading/Gas Midstream fell short of the extraordinarily high result that it achieved in the same period last year. The Group’s external revenue increased by 5% to €15.3 billion.
Electricity generation up 18%
RWE generated 18% more electricity in the first quarter of 2010 than it did during the same quarter last year (60.4 billion kWh). Improved market conditions for gas- and coal-fired power stations in Germany and the increased availability of the Biblis nuclear power station enabled generation to increase by 10% to 43.8 billion kWh. In the Netherlands/Belgium division, which combines the activities of Essent and the former RWE Energy Nederland, electricity generation came to 4.3 billion kWh. The figure for the UK was unchanged at 9 billion kWh.
Growth in electricity and gas sales
The increase in demand for electricity and gas can be considered a sign that economic recovery is starting. Industrial production picked up during the first few months of the year. Together with the long, cold winter, this was the main reason for the growth in energy demand in the RWE markets. The RWE Group’s electricity sales increased by 5%, the gas sales rose by 31%. Essent made a major contribution to this result.
German electricity customer numbers continue to grow. Compared to the same period last year, RWE had about 70,000 more residential and commercial customers at the end of the first quarter of 2010, bringing the total up to some 6.8 million. In the UK, customer numbers fell to 4 million on account of major price competition. The position in the electricity market for residential, commercial and business customers improved in Hungary and Poland. In the Netherlands and Belgium, Essent supplied electricity to some 2.3 million customers, about the same number as at the end of 2009.
The number of residential and commercial customers in the German gas market increased by some 53,000; the number of business and industrial customers also increased. Customer losses were recorded in the UK and in the Czech Republic, where competition on the gas market is now picking up. The number of gas customers in the Netherlands and Belgium remained more or less constant compared to the end of 2009, at just under 2 million.
RWE continued to increase its workforce in the first quarter of 2010. As at 31 March 2010, the Group had a total of 70,940 employees, up 214 on the end of 2009. The figure for Germany was up by 470.
Capex at record levels
During the first quarter, RWE invested €1.18 billion in property, plant and equipment, up 38% year on year. Plants with a generating capacity of around 12,000 MW are under construction or have recently been commissioned, making RWE one of the largest investors in the European energy sector. The focus remains to increase renewable capacity and to build highly efficient fossil-fuel-fired power stations.
Outlook for 2010 as a whole
RWE has set itself the goal for 2010 of considerably exceeding the high results achieved last year. The consolidation of Essent will have a positive effect. RWE’s efficiency enhancement programme, which is expected to achieve an improvement in earnings of €700 million in 2010 compared to the reference year 2006, will also have a positive effect. The Group confirms its outlook, envisaging an increase in EBITDA of 5% to 10% in 2010. Operating result and recurrent net income are expected to grow by approximately 5%.
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 accuracy of these statements.