((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
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RWE responds to investor calls for share buybacks
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Cites weaker prospects for U.S. offshore wind and hydrogen
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RWE now targets mid-range for adjusted annual Ebitda
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RWE’s adjusted Ebitda for the first nine months of the year fell 30% but beat the polls
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(Mid-day stock earnings releases, incorporating press call statement in paragraph 9, analyst quote in paragraph 3) by Christoph Steitz, Kanjyik Ghosh and Vera Eckert
RWE shares
RWEG.DE rose 8.3% on Wednesday after the group announced a 1.5 billion euro ($1.6 billion) share buyback, citing a weaker rationale for wind investments American offshore after the election of Donald Trump and a slowdown in the rise of European hydrogen.
By launching the buyout, which will begin in the fourth quarter and extend over 18 months, Germany’s largest utility company is bowing to growing pressure from investors to review the allocation of its capital in the face of to the decline in returns from clean energy projects.
Analysts welcomed the decision. “Capital allocation has been an important point of the debate on RWE,” commented RBC Europe’s equity research department.
RWE also reported better-than-expected financial results for the first nine months of the year, a slight increase in guidance for the full year and confirmation of a dividend target of 1.1 euros per share for 2024.
Its shares had lost 27% since the start of the year.
The company said risks to offshore wind had increased in light of the election of Trump, an outspoken critic of the technology, as the next president of the United States. It said its project off the US east coast could be delayed due to outstanding permits.
It also warned that Europe’s planned increase in hydrogen production was not going as planned, adding that this could delay its efforts to build electrolysis capacity, echoing similar comments from Uniper UN0k.DE , a smaller rival, last week.
RWE’s decision reflects broader fears of what Trump’s return to the presidency could mean for clean energy investments in the United States, with parts of current President Joe Biden’s clean technology agenda that should be deleted.
However, Chief Financial Officer Michael Mueller said that while caution is needed when it comes to offshore wind, his company still views onshore wind, solar and battery projects in the United States as attractive, citing demand for energy, especially for data centers.
IMPROVED OUTLOOK FOR THE WHOLE YEAR
RWE gave a slightly more optimistic outlook for 2024, saying it now expected to hit the midpoint of the target ranges for adjusted core profit and adjusted net profit, citing better prospects for its trading unit and power plants. gas electric.
The group previously expected earnings before interest, taxes, depreciation and amortization to reach the low end of an adjusted range of 5.2 billion to 5.8 billion euros, and adjusted net profit of 1.9 billion to 5.8 billion euros. 2.4 billion euros in 2024.
RWE’s adjusted Ebitda for the first nine months fell 30% to €3.98 billion, but exceeded the €3.87 billion forecast in a company survey on October 29.
(1 $ = 0,9424 euros)
