RWE confirms strong 2021 performance but flags Ukraine risks

Germany’s biggest power producer RWE confirmed on Tuesday an annual net profit of US $1.73 billion (1.57 billion euros) and adjusted EBITDA of $4.01 billion (3.65 billion euros) for the 2021 fiscal, surpassing the upper end of the forecast range for its financial performance and closing the year significantly above 2020.

RWE, which makes electricity from solar, wind, water, biomass, gas, coal and nuclear energy, attributed the success to its “outstanding trading performance” and higher earnings from conventional power generation. The company also said that as the year progressed, it has made up for the poor start to 2021 caused by the extreme weather in Texas.

RWE had earlier forecast adjusted net profit of 1.3 billion euros to 1.7 billion euros. It also raised the outlook for 2022, citing higher margins in its power generation business.

With energy security and supply constraints under the spotlight in Europe, 2021 was yet another year for RWE when it continued investing heavily in the expansion of its green portfolio, it said in a statement. Around $4.7 billion was invested in the core business, 12 percent more than in the previous year.

Almost 90 percent of the RWE Group’s capex complies with the proposed green investment criteria of the EU taxonomy, the company said.

RWE said that on the basis of its strong earnings, a dividend of $0.99 per share for fiscal 2021 will be proposed at the virtual Annual General Meeting on 28 April.

The utility also warned of the far-reaching risks in the case of an escalation in Ukraine. The impact of the war is difficult to gauge and is not reflected in the growth outlook that the company confirmed, RWE said in a separate statement.

RWE, which is a buyer of gas from Gazprom, said it was unclear what impact the current crisis would have on its long-term gas purchase agreement with the Russian oil company, adding it has the option of negotiating price adjustments during review periods.