BERLIN: German RWE recorded a surge in profits following a tax refund from the German government, with the German utility confirming its full-year earnings would be at the upper end of its forecast range.
Shares in RWE rose 3 per cent after the company posted half-year net income of €2.7bn, up from €457m last year, after receiving a refund of about €1.7bn from Berlin. Adjusted net income — which does not include the refund — totalled €809m, a 35 per cent rise on 2016.
Adjusted earnings before interest, tax, depreciation and amortisation stood at €3.2bn, compared to €3bn last year. The company confirmed its guidance for the year, saying adjusted ebitda would be at the upper end of its forecast range of €5.4bn-€5.7bn.
Germany’s constitutional court ruled in June that a nuclear fuel tax imposed on the utilities had been illegal, opening the way for RWE, Eon and EnBW to claim at least €6.3bn in reimbursements.
The decision was a rare piece of good news for a sector that has struggled since Chancellor Angela Merkel’s decision in the aftermath of the Fukushima disaster in March 2011 to shut down Germany’s nuclear power stations.
RWE announced shortly after the court’s ruling that it would pay more than a third of the tax refund to shareholders in the form of a special dividend of €1 per share, on top of a planned ordinary payout of €0.5 per share.
The company had previously suspended its dividend for two years as its balance sheet came under strain from mounting nuclear clean-up liabilities and the cost of Germany’s Energiewende — the shift from fossil fuels and nuclear to renewable power — which battered the conventional power producers such as RWE and Eon.
RWE last year responded to the crisis in the sector by forming a new subsidiary, Innogy, which groups together its renewables business, power grids and retail energy services. The company was listed in Frankfurt in October. RWE, which retains a 74 per cent stake in Innogy, kept hold of the conventional power business.
RWE said the nuclear fuel tax refund helped it reduce net debt by €1.2bn to €21.5bn.
Rolf Martin Schmitz, chief executive, said RWE was “on track” and its financial situation “provides us with a solid foundation for the future”.
“And we made the right decisions in defining our strategy,” he added in a statement.
But performance diverged strongly between divisions. Ebitda in supply and trading was €131m, compared to a loss of €153m last year. But in lignite (“brown coal”) and nuclear, adjusted ebitda fell from €471m last year to €401m, a drop of 15 per cent which the company blamed on lower wholesale electricity prices compared to last year. European power earnings fell to €222m from €316m last year.
