Germany energy giant RWE sees tough times ahead

11th November 2010, Comments 0 comments

Germany's second-largest energy firm, RWE, said Thursday it was maintaining its profit forecast for 2010 at around five percent but warned of "substantial burdens" in the years ahead.

Operating profit was up 10.8 percent in the nine months to September at 6.2 billion euros (8.5 billion dollars), falling short of what analysts surveyed by Dow Jones Newswires had forecast.

And the group said it faced challenging times ahead, notably from Chancellor Angela Merkel's decision to impose a tax on nuclear fuel, one of RWE's main businesses.

"Overall, RWE confirms its earnings outlook for 2010. However, the group expects that substantial burdens will arise in the coming years," the firm said in a statement.

"We will face difficult times. We must 'weatherproof' ourselves for this," Juergen Grossmann, the company's chief executive was quoted as saying.

RWE said it expected the fuel tax to hit its operating profits by an average of 600-700 million euros per year from 2011.

The group's net profits for the January to September period were down 5.5 percent at 2.6 billion euros.

On Wednesday, RWE's rival EON said its operating profit would fall in 2011 and 2012 before returning to the level of 2010 in 2013.

EON also warned of "considerable business challenges" in the years ahead.

© 2010 AFP

0 Comments To This Article