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RWE Group EBITDA decreased 2% to €7 billion

Staff writer ▼ | March 9, 2016
The RWE Group was unable to match the operating result from the previous year, but nonetheless achieved its earnings targets despite unfavourable framework conditions in the energy sector.
RWE Group
RWE Group   The successful disposal of RWE Dea
The 2% decline in EBITDA compared to the previous year, to €7 billion, was actually smaller than expected. This can be attributed to special items such as the full consolidation of the Slovak energy utility VSE from the end of August.

Another reason for exceeding the target was one-off income realised for insurance claims for the power plant project at Hamm. Both of these items had a positive effect on EBITDA and the operating result, although the decision not to complete the construction of Block D required the company to recognise an impairment of €654 million, which was included in the operating result.

At €3.8 billion (4% below the previous year), the operating result was in line with expectations, as was adjusted net income which amounted to €1.1 billion (12% down on the previous year).

In fiscal 2015, the RWE Group passed a number of important milestones in terms of boosting its financial strength. Net debt was down almost one-fifth, to €25.1 billion. The main reason for this was the successful disposal of RWE Dea, which had an impact of €5.3 billion, including the interest on the sale price.

Further disposals had a total debt-reducing effect of €1.4 billion. The increase in the discount rates used to calculate provisions for pensions, which reflect the recent development of market interest rates, also helped reduce debt.

Good progress was also made in implementing the current efficiency-enhancement programme: a lasting effect on the operating result of €1.6 billion was achieved by the end of 2015, which was €100 million more than the original target.

The company is therefore planning new steps to increase its operating effectiveness, focusing on conventional power generation and the UK supply business, which it intends to comprehensively restructure. In total, the Group aims to achieve a positive impact of €2.5 billion on the operating result (previously €2.0 billion), which should be fully felt from 2018 (previously from 2017).

The strategic restructuring of the RWE Group, which was decided upon at the end of 2015, is also on schedule.

The new subsidiary bundling renewables, grids and retail both in Germany and internationally, will begin operating on 1 April 2016.

Looking back at 2015, CEO of RWE AG Peter Terium noted, “Last year we had to deal with a number of difficulties, ranging from discussions on energy policy to problems in our UK supply business and the further decline in prices for wholesale power trading.

“But I am proud of the efforts put in by our employees, since we have collectively kept the RWE Group on track. This has meant making a number of tough decisions. As a result, we have opened up new business opportunities. However, energy policy challenges still continue to pose a burden.”