RWE stock down on earnings dip

Investing.com -- Shares of RWE AG (ETR:RWEG ) were down  on Wednesday after it reported a drop in earnings for the first half of 2024.

The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell to €2.9 billion from €4.1 billion during the same period last year, marking a decrease of about 30%.

The decline in earnings is due to a sharp drop in power prices, which have been influenced by lower gas costs and increased renewable energy generation. 

After benefiting from high electricity prices over the past two years, RWE has faced reduced revenues as market conditions have shifted.

RWE AG's first-half 2024 results have surpassed consensus expectations, with adjusted EBITDA reaching €2.90 billion, which is 3% above consensus estimates, said analysts at UBS Global Research in a note. “But 2% below UBSe driven by a slightly weaker result in Supply and Trading,” they added

Despite this downturn, RWE achieved record earnings from its renewable energy sector. The company reported that wind and solar power now account for 45% of its total power production. 

Enhanced weather conditions and the commissioning of new renewable capacity contributed to these strong results. Additionally, RWE successfully reduced its carbon dioxide emissions by 27%.

RWE has reaffirmed its FY2024 guidance, expecting adjusted EBITDA to be at the lower end of the previously stated range of €5.2 billion to €5.8 billion. Consensus estimates for EBITDA are €5.4 billion. 

The company also expects adjusted Net Income to fall between €1.9 billion and €2.4 billion, with consensus at €2.0 billion and UBS at €1.9 billion. The dividend target of €1.1 per share for 2024 remains unchanged.

 

Source: Investing.com