RWE lifts FY earnings target on strong trading business – Reuters

BERLIN, July 30 (Reuters) – Germany’s largest power producer RWE (RWEG.DE) raised its full-year earnings guidance on Friday, buoyed by a strong trading unit performance in the first half.

The wholesale subsidiary, called RWE Supply & Trading, has benefited from demand for commodities in a post-pandemic economic recovery, political impetus on carbon prices that drove price gains elsewhere, while its expertise is relevant amid logistics squeezes.

“Given that our outlook for 2021 was muted due to the negative effects from the Texas cold snap at the beginning of the year, we are now pleased to raise our forecast for the RWE Group for fiscal 2021,” finance chief Michael Mueller said.

A cold spell in the U.S. state of Texas in the first quarter had caused RWE’s local wind farms to stop running. read more

RWE said it now expects adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 3.0 billion euros to 3.4 billion euros ($3.56 billion-$4.04 billion), up from an earlier guidance for 2.65 billion to 3.05 billion euros.

The trading unit’s EBITDA will now close the year significantly above 350 million euros, it said. It reached 525 million in the first half of year, which overshot an original estimate of 150-350 million.

Big swings in earnings are typical of wholesale trading units, which track commodity prices’ volatilities.

The outlook for other RWE divisions was unchanged.

The company is due publish its full interim report for the first six months on Aug. 12.

Shares in RWE rose as much as 2.7% in early trade and were up 1.3% at 0723 GMT, making them the only gainer on the German blue-chip DAX index (.GDAXI).

($1 = 0.8415 euros)

Reporting by Caroline Copley and Vera Eckert; Editing by Maria Sheahan

Our Standards: The Thomson Reuters Trust Principles.