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Gas price surge helps Germany's RWE beat 2021 outlook

Stock MarketsJan 26, 2022 16:11
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© Reuters. FILE PHOTO: The logo of the German power supplier RWE is pictured at the RWE headquarters in Essen, Germany, November 15, 2021. REUTERS/Thilo Schmuelgen

FRANKFURT (Reuters) -Record high gas prices, driven by rising demand and anxiety over Russian supplies, helped core profit at RWE's trading division to rise by 43%, preliminary 2021 results showed on Wednesday, outstripping the company's guidance.

On a group level, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) came in at 3.65 billion euros ($4.12 billion) in 2021, an increase of 11% compared with 2020, Germany's largest power producer said.

Adjusted net income rose by a quarter to 1.57 billion euros.

The utility had expected adjusted EBITDA of 3 billion to 3.4 billion euros and adjusted net profit of 1.05 billion to 1.4 billion in 2021.

Profits at the utility's trading desk, where commodities are traded much like shares on the stock exchange, were 731 million euros, lifted by gas price swings.

Gas prices in Europe hit record levels last year as the economy recovered from the impact of COVID-19 and reduced flows of Russian gas West stoked uncertainty about supply.

The profit was also driven by a better-than-expected performance at the group's gas, biomass and hydroelectric power division, which manages its gas-fired power plants as well as combined hard coal and biomass plants in the Netherlands.

Shares in the company, which is spending 50 billion euros by the end of the decade to expand its renewables business, rose 3.8% by 1549 GMT.

The company confirmed its dividend proposal of 0.90 euros per share for 2021.

($1 = 0.8858 euros)

Gas price surge helps Germany's RWE beat 2021 outlook
 

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