RWE, a leading German energy company, anticipates lower earnings for 2024 in light of the recent drop in energy prices on the European wholesale markets.
The company expects these earnings to be at the lower end of the range presented at its Capital Markets Day on 28 November 2023.
RWE anticipates closing the fiscal year 2023 with an adjusted net income of €4.5 billion, surpassing the preliminary forecast.
The RWE Group’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is projected to reach €8.4 billion, exceeding the anticipated range. Notably, adjusted EBITDA in the core business is expected to stand at €7.7 billion, surpassing the upper end of the forecast range.
Michael Muller, CFO of RWE AG, expressed his satisfaction with the outstanding preliminary results, emphasizing the success of their ‘Growing Green’ strategy.
“The very good preliminary results once again confirm that our ‘Growing Green’ strategy is paying off. We expect to close fiscal 2023 significantly above the previous year,” Michael Muller said. He attributed this success to higher earnings from international electricity generation, a robust supply, and trading business, and the expansion of renewables capacity.
Breaking down the business performance for fiscal 2023 by segment:
Offshore Wind: The Offshore Wind segment’s adjusted EBITDA is expected to be €1,664 million, reflecting an increase from the previous year, primarily attributed to the commissioning of new capacity and favorable wind conditions, particularly at UK sites.
Onshore Wind/Solar: Adjusted EBITDA in this segment is projected to be €1,248 million, a significant rise from €827 million in fiscal 2022. The increase is attributed to the acquisition of Con Edison Clean Energy Businesses in the US, along with new wind and solar farm commissions. However, lower realized electricity prices had a counteracting effect.
Hydro/Biomass/Gas: The adjusted EBITDA in this segment is expected to rise to €3,190 million, up from €2,369 million in the prior year, primarily driven by higher earnings from short-term power station dispatch in the international generation portfolio and increased generation margins.
Supply & Trading: A robust trading performance across commodities and regions is expected to result in an adjusted EBITDA of €1,578 million, up from €1,161 million in 2022. The previous year was impacted negatively by a one-off effect related to sanctions on coal supplies from Russia.
German Coal and Nuclear Business: The only segment expected to close below its prior-year level, the adjusted EBITDA is anticipated to decline to €705 million, compared to €751 million in 2022. Lower margins from unhedged electricity production assets and the shutdown of the Emsland nuclear power plant contributed to this decrease in earnings.