German utility company RWE posts solid H1 results ahead of restructuring

Source: Xinhua| 2019-08-14 20:25:08|Editor: xuxin
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BERLIN, Aug. 14 (Xinhua) -- Earnings before interest, taxes depreciation and amortization (EBITDA) of German utility company RWE grew by one fifth to 1.4 billion euros (1.6 billion U.S. dollars) in the first half year (H1) of 2019, the company announced on Wednesday.

"The strong operating result gives us tailwind for the coming months, which will be one of the most exciting periods in our company's history," said Rolf Martin Schmitz, chief executive officer (CEO) of RWE.

RWE is currently undertaking a large transaction with its German competitor E.ON which will see RWE sell the network and sales business of its subsidiary Innogy to E.ON, in return for RWE acquiring E.ON's renewable energy business.

The transaction would turn RWE into "one of the world's leading producers of electricity from renewables," said the company.

RWE is expecting to close the transaction with E.ON in September and would be setting aside 1.5 billion euros each year in order to "continue expanding the business."

In the first half of 2019, RWE saw an "unusually good performance" in its Supply and Trading division where EBITDA more than quadrupled to 434 million euros from the prior year.

This increase was mainly due to a "good trading performance" as well as burdens "experienced by RWE last year" that did not recur in the first half of 2019, the company stated.

EBITDA in RWE's European Power segment, however, nearly halved to 99 million euros in H1 2019 and this "significant decline" had been caused by power plant outages for overhauls as well as "unfavorable market conditions for hard coal-fired power stations."

The company confirmed its business guidance for 2019, which it had previously raised at the end of July.

RWE is currently expecting EBITDA to amount to between 1.4 billion and 1.7 billion euros instead of the previously assumed operational profit range of 1.2 billion to 1.5 billion euros for the full fiscal year 2019.

Investors reacted positively after RWE published its half-year results as shares of the company rose by nearly 2 percent, winner in the German stock index DAX on Wednesday morning.