2nd UPDATE: RWE Sees Stable '09 Pfts, Upgrades Mid-Term Outlook
26 Fevereiro 2009 - 5:23AM
Dow Jones News
RWE AG (RWE.XE), Germany's largest power producer by output,
Thursday said it expects stable earnings in 2009 and raised its
medium-term profit targets as it reported a 4.1% drop in 2008 net
profit.
RWE said it expects higher sales in 2009, despite weaker
economic conditions.
Through 2012, the Essen-based company now expects operating
profit to rise between 5% to 10% on average per year while
recurrent net profit is expected to increase 10% per year on
average in the same period.
The company had previously targeted operating profit to rise 5%
on average per year and increases of 5% to 10% for recurrent net
profit.
RWE said its previously announced cost cutting and efficiency
improvement program over EUR1.2 billion through 2012 will help
achieve the targeted earnings increases.
By the end of 2009, the company expects the measures will have
driven earnings higher by around EUR450 million.
However, RWE said the new medium-term earnings targets are
dependent on the recession not having a "long-lasting negative
impact on wholesale electricity prices."
"In view of the substantial fluctuations in wholesale
electricity prices, the company is basing its forecast on the
expectations of an average realized German electricity price of at
least EUR60 per megawatt-hour during this period," RWE said.
On Germany-based European Energy Exchange forward baseload
prices for delivery in 2012 currently traded at between
EUR48.10/MWh to EUR49.10/MWh.
The planned EUR8.24 billion takeover of Dutch utility Essent NV
that was announced last month isn't yet reflected in the new
medium-term targets, RWE added.
RWE has said the acquisition of Essent would make it the
fourth-largest energy firm in Europe with 22.5 million power and
12.5 million gas customers and a total generation capacity of
around 51 gigawatts across the continent.
Germany's second-largest utility by market value behind E.ON AG
(EOAN.XE) also said it plans to maintain its investment
program.
The company has pledged to invest an average of around EUR6.5
billion per year between 2008 through 2012, amounting to more than
EUR30 billion.
RWE said net profit in the year ended Dec. 31 fell to EUR2.56
billion from EUR2.67 billion a year ago, just missing the EUR2.64
billion average estimate of 17 analysts polled by Dow Jones
Newswires.
Profits were mainly hit by a EUR600 million impairment charge
related to the initial public offering of RWE's U.S.-based water
unit American Water Works Co (AWK) in early 2008.
Recurrent net profit, which is adjusted for the impairment
charge and other non-recurring items, came in 12.8% higher at
EUR3.37 billion - more or less in line with the EUR3.44 billion
analysts had forecast.
The company didn't immediately publish fourth-quarter figures,
but a Dow Jones Newswires calculation showed that net profit in the
three months to Dec. 31 swung to a net profit of EUR347 million
compared with a loss of EUR167 million in the same period last
year.
Sales rose more than 15% to EUR48.95 billion from EUR42.51
billion, while analysts forecast EUR47.29 billion.
RWE shares closed Wednesday at EUR52.63.
Company Web site: www.rwe.com
-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503;
jan.hromadko@dowjones.com