German utility RWE raises earnings forecast for 2019 amid lignite compensation talks
Clean Energy Wire / Reuters
RWE AG, one of Germany’s largest utilities, has raised its earnings expectations for 2019 due to a stronger than anticipated performance in its energy trading unit. RWE forecasts a net income of 0.5 billion to 0.8 billion euros – a increase in outlook of 0.2 billion. RWE shares climbed 3.3 percent following the news, hitting their highest since December 2014, writes news agency Reuters. Expected earnings from other company segments, such as its lignite and nuclear unit and European power division, remained unchanged, however. “With this momentum from our operating businesses, we look forward to the fast approaching implementation of the transaction with E.ON, which will turn RWE into one of Europe’s largest renewable energy companies,” said RWE CFO Markus Krebber. RWE agreed in March 2018 to a major asset-swapping deal with E.ON, one of Germany’s other large utilities, acquiring E.ON’s renewable energy businesses.
The positive outlook for RWE comes at a time when Germany is deciding on a final plan on how to end coal-fired power generation by 2038 at the latest. The German coal exit commission has proposed to shut down several gigawatts of lignite and hard coal capacity by 2022. Coal companies such as RWE are demanding compensation payments for capacity which they would have to take offline before the end of plant lifetimes.