RWE Profit Crumbles on Trading Losses
August 11 2016 - 2:14AM
Dow Jones News
By Monica Houston-Waesch
FRANKFURT--German power utility RWE AG's (RWE.XE) earnings fell
by more than two thirds in the first half of the year partly on
significant losses at its trading business in the second quarter,
the company said on Thursday.
Net profit plunged to 457 million euro ($510.3 million) in the
three months to end-June from EUR1.74 billion in the year earlier
period. RWE's operating profit fell 7% to around EUR1.9
billion.
After a successfull start to the year, RWE's trading business
suffered "significant unexpected losses in the second quarter," RWE
said in a statement.
Electricity sales rose 4% in the first half from a year earlier,
offset by a 7% decline in gas sales volumes. Group revenue fell to
about EUR23.9 billion, from EUR24.8 billion in the first six months
of 2015.
Adjusted net income rose 10% to EUR598 million, due to a low tax
rate and a one-off effect of deferred taxes related to the group's
restructuring. Operational improvement at RWE's conventional power
generation and the one-off sale of property also supported
earnings.
Net debt widened to EUR28.3 billion at the end of June, versus
EUR25.5 billion at the end of December, due to negative free cash
flow and additional pension provisions, given low interest
rates.
RWE confirmed its full-year outlook, but said developments are
likely to be worse than previously expected at its trading and gas
division, and a bit better at its supply division. RWE still
expects an operating result of between EUR2.8 billion and EUR3.1
billion for the year, and adjusted after-tax profit of EUR500
million to EUR700 million.
Write to Monica Houston-Waesch at nikki.houston@wsj.com
(END) Dow Jones Newswires
August 11, 2016 01:59 ET (05:59 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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