- Package of measures on track
- Results in first quarter down on previous year, as expected
After significant one-off burdens caused by energy policy decisions taken in Germany during 2011, RWE will regain ground this year. However, in the first quarter of 2012 the Group was not able to match the result for the same period in the previous year. Declining margins in electricity generation and burdens suffered by the gas midstream business in particular adversely affected the result for the quarter. This was in contrast with an improvement in earnings for RWE Dea. Despite virtually unchanged Group revenue of €15.6 billion, EBITDA was €3.1 billion, down 9% on the same period of the previous year. The operating result decreased by 14% to €2.4 billion. Recurrent net income, the basis for determining the dividend, fell by 20% to
Nevertheless, for the year as a whole, RWE continues to forecast that it will be able to end the year with an operating result and recurrent net income at 2011 levels. This is because the decline in the operating result compared to the previous year’s quarter cannot be extrapolated to the year as a whole, since the first quarter of 2011, in contrast to the following three quarters, had not yet been affected by the accelerated phase-out of nuclear energy in Germany.
Electricity generation stable, electricity and gas sales down year on year
During the first three months of the year, the RWE Group generated 60.4 billion kilowatt hours (kWh) of electricity – which was almost on a par with the previous year’s level. The Biblis nuclear power station has been off the grid since March last year. The resulting decline in generation was offset mainly by the commissioning of new power stations: the two Dutch gas-fired power plants, Claus C and Moerdijk 2, went online at the start of the year, and the dual-block lignite-fired power plant at Neurath near Cologne is currently undergoing a trial run.
Electricity sales fell by 9% to 73.8 billion kWh, mainly due to the deconsolidation of
Amprion. Sales to residential and commercial customers were largely stable. In addition, electricity sales to distributors increased in Germany. While the number of industrial and corporate customers was down in Germany and the Netherlands, RWE gained new customers in this segment in the UK. Group-wide, gas sales fell by 12% to 113.6 billion kWh, caused by low capacity utilisation of the gas-fired power stations supplied by RWE and the decline in sales to industrial and corporate customers due to competition.
Package of measures on track
Implementation of the package of measures to improve the Group’s financial strength is proceeding well. In March, RWE placed two hybrid bonds with a value of about €1.3 billion, thus further improving its equity base. The company reached an agreement regarding the sale of a 19% shareholding in the German regional utility VSE, based in the Saarland. The Group has also made progress on its price reviews for gas purchasing agreements: further contracts have now been converted to wholesale gas price indexation. Particular attention will now be paid to the remaining price reviews with three major international oil and gas companies.
Outlook for 2012
Despite divestments, RWE expects earnings for 2012 to be stable. For the current year, the Group maintains its forecast that the operating result and recurrent net income will be on a par with the previous year.
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.