The energy company RWE has done good business primarily with electricity generation from renewable energies and LNG trading. The DAX group more than doubled its profits.
The energy company RWE made huge profits from electricity generation and trading in the first nine months of the 2023 financial year. The adjusted net result at the end of September was almost 3.4 billion euros – more than twice as much as in the same period last year. “RWE is growing, and doing so very profitably,” said CFO Michael Müller in a conference call.
Growing with renewable energies
Müller cited the DAX company’s “strong investment activity” as the reason; the Essen-based company invested 20.3 billion euros in acquisitions and renewable energies in the past nine months. New wind farms were put into operation in the North Sea. The takeover of the US solar power producer Con Edison on March 1st also had a positive effect.
The result: RWE’s generation capacity has increased by around six gigawatts since the beginning of the year. “This leads to significantly increased electricity production from renewable energies, which contributes to our earnings growth,” said the CFO.
Better business with LNG
RWE wants to continue this development; according to the company, projects with around eight gigawatts are currently under construction worldwide. The DAX company’s core business includes electricity generation through wind and solar systems, run-of-river, pumped storage, biomass and gas power plants as well as energy trading.
According to RWE, business with liquefied natural gas (LNG) in particular improved in energy trading. The company also benefited from a base effect, as the previous year’s result was burdened by value adjustments on contracts for hard coal purchases from Russia.
Annual profit target already almost reached
Analysts reacted positively to the balance sheet presentation. Vincent Ayral from the US bank JPMorgan emphasized that the utility exceeded expectations with very strong results. After nine months, the annual target for adjusted surplus has been practically achieved, explained analyst Alexander Wheeler from the Canadian bank RBC.
RWE continues to forecast a net profit of 3.3 to 3.8 billion euros for the year as a whole. The dividend for the current financial year is to be increased by ten cents per share to one euro, the company had already announced this in March 2023. On November 28th, RWE plans to present its revised growth strategy at a capital market day in London.
Mixed year for RWE shareholders
The figures are well received on the stock market. The RWE share is one of the biggest DAX winners with an increase of up to 2.6 percent to 37.27 euros. The upward trend since the beginning of October continues. The title had previously lost over 27 percent since its high in January at EUR 43.55.