RWE confirms full-year forecast for drop in profits
RWE, Germany's second-biggest power supplier, said Wednesday that profits were down in the first three months and it is sticking to its forecast for a decline in underlying earnings for the whole year.
"Business performance progressed as planned during the first quarter of 2015. As expected, the continued drop in margins in conventional electricity generation resulted in earnings shortfalls," RWE said in a statement.
In the period from January to March, net profit more than doubled to 2.166 billion euros ($2.4 billion), but that was due to gains from the sale of the group's oil and gas unit RWE DEA.
Underlying or operating profit fell by 3.4 percent to 2.2 billion euros, while revenues increased by 2.9 percent to 14.632 billion euros.
Looking ahead, RWE said it "confirms its outlook for the 2015 fiscal year."
It expected full-year underlying profits to fall to 6.1-6.4 billion euros from 7.1 billion euros in 2014.
Net profit was projected to come out at 1.1-1.3 billion euros compared with 1.2 billion euros last year.
It warned, however, that government plans to introduce a levy on older fossil-fuelled power plants would have a negative impact on earnings.
In a bid to meet Germany's climate protection targets, the economy ministry put forward plans in March to impose an additional levy on power stations older than 20 years if their emissions exceeded certain annual limits.
"A financial burden of this nature would have a substantial negative economic impact on our lignite mines and lignite-fired power stations," RWE complained.
© 2015 AFP