Germany

Germany

Renewables boost RWE profits in H1

Wind and solar earnings helped RWE increase its earnings in the first half of the year following its acquisition of renewable energy assets from E.on — along with higher prices for coal and nuclear generation

RWE commissioned its 151MW Peyton Creek wind farm in Texas earlier this year
RWE commissioned its 151MW Peyton Creek wind farm in Texas earlier this year

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RWE’s profit increased in the first half of the year, according to its first financial results published since the incorporation of renewable energy assets from E.on and Innogy.

Its adjusted Ebitda for the first six months of 2020 rose by 18% to €1.8 billion, while adjusted Ebit grew 33% to €1.1 billion.

This was primarily due to the inclusion of the renewables business it acquired from E.on in September 2019, RWE explained in its H1 financial report.

Its core businesses of renewables, gas and supply and trading accounted for €1.5 billion of Ebitda, up 9% from the previous year, while the German utility's coal and nuclear earnings rose to €310 million due to higher wholesale prices.

CFO Markus Kreber added that the company had weathered the impacts of the coronavirus pandemic so far, and so confirmed RWE’s full-year guidance, with €2.7-3 billion forecast in adjusted Ebitda and €1.2-1.5 billion in adjusted Ebit.

RWE had agreed credit lines worth €1.7 billion as a shield against the financial impact of the coronavirus impact, from which it has drawn €200 million.

Adjusted Ebitda from RWE's offshore wind segment rose by 19% to €585 million in the first half of the year, due to better wind conditions in Q1, RWE stated. It expects adjusted Ebitda from offshore wind of €900 million to 1.1 billion for 2020.

Meanwhile, adjusted Ebitda from its onshore wind and solar segment rose by 12% to €273 million in the first half of the year, due to newly commissioned capacity and higher wind capacity. The developer expects adjusted Ebitda of €500-600 million from its onshore wind and solar segment.

In the first half of the year, RWE announced a deal to acquire a 2.7GW development pipeline in Europe from Nordex and named SGRE the preferred turbine supplier for the Sofia offshore wind farm as part of its efforts to grow its renewable energy portfolio.

However, RWE also expects adjusted Ebitda of €500-600 million from its coal and nuclear business division for the full year – the same earnings it forecasts from onshore wind and solar. RWE’s earnings from coal and nuclear doubled to €310 million in the first half of the year due to higher wholesale prices.

Shares in RWE inched up 1.7% to €34.27 following publication of its financial results, but dipped slightly afterwards.

RWE formally completed the acquisition of E.on and Innogy’s renewable energy assets under an asset swap deal at the end of June, growing its portfolio of operating wind and solar capacity to roughly 9GW. However, RWE had received the assets shortly after the deal was approved by the European Commission last September, but the transaction was only concluded this June.

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