Germany

Germany

Texas freeze and lower European winds hit RWE in Q1

RWE faced a roughly €400m hit to earnings in its onshore wind and solar unit due to the Texas cold snap and subsequent blackouts

RWE's adjusted Ebitda was down by a third in Q1 2021, while net income was halved from the previous year
RWE's adjusted Ebitda was down by a third in Q1 2021, while net income was halved from the previous year

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The Texas freeze and low winds in Europe hit RWE’s profits in the first quarter of 2021, with adjusted Ebitda down by a third and net income nearly halved from the previous year.

It recorded adjusted Ebitda of €883 million – down 33% from one year earlier – and adjusted net income of €340 million – down 44%  – in the first three months of 2021.

Meanwhile, in its core businesses, which includes offshore and onshore wind, solar, hydro, biomass and gas, as well as supply and trading, RWE recorded adjusted Ebitda of €555 million in the first three months of 2021 – down 46% year on year.

The German utility explained that this decline in earnings can be attributed to the Texas freeze, and wind volumes in northern and central Europe being well below the above-average levels experienced last year.

The blackouts in Texas resulted in a roughly €400 million hit to Ebitda in its onshore wind and solar unit, RWE added.

It had previously warned that buying electricity at abnormally high prices to meet its own delivery obligations while part of its wind fleet was down would hit its profits. The company had anticipated the storm to negatively impact Ebitda for 2021 in "the range of a low-to-medium three-digit million amount".

RWE has maintained its financial guidance for 2021, though. It still expects full-year Ebitda between €2.65-3.05 billion at group level, and €1.8-2.2 billion in its core businesses. It expects full-year net income between €750 million and €1.1 billion.

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