RWE posts 2020 result

4C Offshore | Tom Russell
By: 16/03/2021 RWE
German multinational energy company RWE has issued its fiscal 2020 results, citing a successful year from a financial perspective.

The company, as part of its transition plans, decommissioned its last hard coal-fired power plants in Germany and the United Kingdom in 2020, and the first lignite-fired unit was also taken off the grid as a consequence of the German coal phase out. Carbon emissions decreased by more than 60% between 2012 and 2020.

“The past financial year was an outstanding one for RWE, despite the challenges of the coronavirus crisis. We clearly exceeded our forecast. This is a very good basis to continue our growth course. We are investing billions of euros in renewables. At the same time, we are rigorously and reliably reducing our CO2 emissions with a clear target: RWE will become carbon neutral by 2040,"
said Rolf Martin Schmitz, CEO of RWE AG.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) reached €3.2 billion (pro forma result for 2019: €3.0 billion). That meant the upper limit of the forecast range of €2.7 billion to €3.0 billion was surpassed. Adjusted EBITDA from the core business, at €2.7 billion (pro-forma result for 2019: €2.7 billion) exceeded the forecast of €2.15 billion to €2.45 billion.

RWE achieved an adjusted EBIT of €1.8 billion (pro-forma result for 2019: €1.5 billion) against an earnings forecast of between €1.2 billion and €1.5 billion. Adjusted net income of €1.2 billion exceeded the outlook of €0.85 billion to €1.15 billion. The operating performance is primarily thanks to the very good results from the Supply & Trading business.

For fiscal 2021, RWE aims to achieve an adjusted EBITDA of between €2.65 billion and €3.05 billion at Group level; in the core business, it should amount to between €1.8 billion and €2.2 billion. The forecast for adjusted EBIT is between €1.15 billion and €1.55 billion, and for adjusted net income the target is between €0.75 billion and €1.1 billion. The expected decline in the result is mainly due to the impact of the extreme cold snap in Texas. The compensation payment for the accelerated phaseout of nuclear energy in Germany, on the other hand, is not included in the outlook and is part of the non-operating result.

In the company's offshore wind segment, adjusted EBITDA increased by 11% to €1,069 million. This was attributed to favourable wind conditions in the first quarter of 2020. For the current fiscal year, RWE forecasts a result of between €1,050 million and €1,250 million. A positive effect will result from RWE increasing its stake in the
Rampion wind farm in the UK to 50.1%, as agreed with E.ON, and the fact that the first turbines at the UK wind farm Triton Knoll are already delivering electricity.

In 2020, RWE invested €2.3 billion in property, plant and equipment. Of this, €1.9 billion were used for the construction of new wind power and solar plants as well as battery storage facilities. 84% of the capital expenditure meets the criteria for environmentally sustainable investment, based on a draft EU taxonomy.

RWE stated that it will continue to focus on growth in 2021. The company is forging ahead with construction work on the
Triton Knoll offshore wind farm (857 MW, RWE share 59%) in the North Sea off the coast of the UK, as well as on Kaskasi near Heligoland (342 MW, RWE share 100%). Both wind farms will be completed in 2022. In addition, over 20 onshore wind, solar and battery plants with a total capacity of around 2 GW will start commercial operation this year. Between 2020 and 2022, RWE plans to invest more than €5 billion net in its renewables portfolio.

By the end of 2022, RWE aims to expand its portfolio of wind and solar power plants from over 9 GW to more than 13 GW. The company is currently building new plants with an installed capacity of 3 GW. The project pipeline comprises development projects totalling about 34 GW. The company is participating in some 30 hydrogen projects.

CFO Markus Krebber commented: “Our financial situation further improved in 2020, thanks to a strong growth in earnings from operating activities and our capital increase. We are investing billions of euros in sustainable projects and are thus laying the foundation for RWE’s long-term success.”