German power utility RWE’s earnings fell by more than two thirds in the first half of the year due largely to significant losses at its trading business in the second quarter.
The company’s results announcement on Thursday made reference to the strong showing by the company’s conventional power unit but overall the story is of net profit falling to $510.3m (EUR457m) in the three months to end-June from $1.93bn (EUR1.74bn) a year earlier. Shares in the company dropped 4 per cent at the open of trading following the news.
RWE highlighted its positive power performance in a tweet on Thursday, noting, “The operating result from conventional power generation increased by 34 per cent, to €390m. The main cause: our efficiency-enhancement programme.”
It said that the amount of power it generates rose 5 per cent in the first half of the year, largely thanks to an improvement in the market conditions for its gas-fired power stations leading to a big increase in their utilisation, especially in the UK.
In response to the fallout of Germany’s decision to phase out nuclear energy and push renewables, RWE is to separate its renewable energy generation, power grid and retail operations into a separate company (Innogy) and sell a 10-percent holding in the business through an IPO later this year.
The two companies are also facing a big bill for the clean-up of Germany’s nuclear power stations, which are all due to close by 2022. A government commission announced in April that Germany’s big utilities should pay €23.3bn towards the cost of waste storage — about €6.3bn more than they had provisioned for.
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