Germany’s RWE sees first-half profits surge on energy trading boost

RWE, Germany’s largest power producer, reported a 20 percent increase in core profits in the first half of 2019, boosted by a stronger than expected performance at its energy trading unit, news agency Reuters reports. First-half adjusted earnings before interest, tax, depreciation and amortization (EBITDA) jumped by a fifth to 1.37 billion euros, the group said in a statement. The strong result gives the company tailwind, as "RWE will soon turn into a ‘new RWE’ – an international player with a clear focus on renewables and energy storage," said CEO Rolf Martin Schmitz. "We will rank among the world’s leading green energy producers." Power plant outages due to overhauls and unfavourable market conditions for both hard coal and lignite-fired power stations led to a significant decline in generation, while the rise in demand for gas-fired power stations triggered by low gas prices partially offset the drop in volumes, the company said.

RWE still operates lignite mines in western Germany as well as hard coal and nuclear power stations but is planning to switch its focus to renewables. RWE agreed in March 2018 to a major asset-swapping deal with E.ON, one of Germany’s other large utilities, acquiring E.ON’s renewable energy businesses. E.ON will largely be in charge of distribution grids while RWE will concentrate on conventional and renewable power generation. RWE says the transaction, expected to close in September, will turn the company into the second largest offshore wind operator and bring its renewable energy portfolio to a total capacity of about 9 gigawatts.