ESSEN (dpa-AFX) - Shares of RWE AG were losing around 3 percent in the German trading after the utility major warned on weak adjusted EBITDA in fiscal 2025 after reporting lower adjusted results in fiscal 2024. The company also said it would cut planned investments by around 10 billion euros.
This was despite reporting significantly higher net earnings in 2024, and the company lifted dividend. The firm also confirmed its mid and long term outlook, expecting earnings growth.
Markus Krebber, Chief Executive Officer, said, 'The outlook generally remains positive: electrification and artificial intelligence are driving demand for electricity, especially in the USA. Thanks to our portfolio of generation assets and diversified development pipeline of new build projects, we are perfectly positioned to meet this rising demand. However, we are also facing challenges in the investing environment, which are becoming increasingly demanding: persistent high inflation, rising interest rates, supply chain bottlenecks, geopolitical tension, and potential tariffs.'
It is impossible to predict the consequences of the change of course in US energy policy for the expansion of renewable energy in the USA at this time, the firm added.
The company added that as a result of stricter risk management and higher return expectations, it will invest less than previously planned through to 2030. RWE will invest a total of 35 billion euros net for the years from 2025 to 2030, about 10 billion euros net less than previously planned.
Looking ahead, for fiscal 2025, RWE expects adjusted net income between 1.3 billion euros and 1.8 billion euros, and adjusted EBITDA of 4.55 billion euros to 5.15 billion euros, both lower than the prior year.
The outlook is based on the expectation that margins from electricity sales and the short-term optimisation of power plant dispatch will normalise. RWE also expects normalised earnings in the Supply & Trading segment.
In addition, RWE reaffirmed its mid- to long-term earnings per share targets despite the lower capital expenditure. The company expects to achieve adjusted earnings per share of around 3 euros in 2027. The target for 2030 remains unchanged at around 4 euros per share. The aim is to increase the dividend by 5 percent to 10 percent annually through to 2030.
Further, RWE confirmed the dividend proposal to the Annual General Meeting of 1.10 euros per share for fiscal 2024, which is 0.10 euro higher than in the previous year, citing the good business performance.
For the current fiscal year, RWE plans to increase the dividend again by 0.10 euro to 1.20 euros per share.
In fiscal 2024, net income attributable to shareholders surged to 5.14 billion euros from last year's 1.52 billion euros. Earnings per share were 6.91 euros, up from last year's 2.04 euros.
Adjusted net income was 2.32 billion euros or 3.12 euros per share, compared to 4.10 billion euros or 5.51 per share a year ago.
Adjusted EBITDA for the year dropped to 5.68 billion euros from last year's 7.75 billion euros. Overall, earnings remained below the level of the previous year, as expected.
External revenue, excluding natural gas tax/electricity tax, was 24.22 billion euros, lower than prior year's 28.52 billion euros.
Power generation declined to 117,801 GWh from 129,701 Gwh last year.
In Germany, on the XETRA, RWE shares were trading at 32.13 euros, down 2.8 percent.
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