Germany’s RWE Group recorded an operating result of EUR 154 million at its renewables division in the first quarter of 2016, a slight increase compared to EUR 153 million reported for the same period a year earlier, with two newly commissioned offshore wind farms in the UK and Germany helping offset a one-off income included in the Q1 2015 results.
The positive impact came from the increased electricity production by the 576MW Gwynt y Môr off the coast of Wales and the 295MW Nordsee Ost north of Heligoland, which were not yet at full capacity in the first quarter of last year. The two wind farms compensated for the one-off income reported last year after RWE sold the grid infrastructure of Gwynt y Môr.
On the other hand, the results in the renewables division were negatively affected by the significant drop in wholesale electricity prices, as some of RWE’s renewable assets do not receive fixed feed-in fees from government and are therefore exposed to this market risk.
Looking ahead, RWE expects its renewables sector to achieve a significantly lower operating result compared to EUR 488 million reported in 2015, which was unusually high due to book gains on divestments and despite impairments.
Overall, in the first three months of 2016, the RWE Group’s EBITDA rose 5% compared to the previous year’s period, to EUR 2.3 billion, and its operating result was up 7% to EUR 1.7 billion.
Despite higher operating income, adjusted net income decreased by 2% year on year to EUR 857 million. This was mainly due to the deterioration of the financial result, since the previous year’s figures still included high profits from the sale of securities. External revenue fell 6% to EUR 13.7 billion.
”Overall, we have achieved a thoroughly respectable result for the first quarter,” said Dr Bernhard Günther, Chief Financial Officer of RWE AG.
”Our three future-oriented divisions, Renewables, Grids and Retail, are developing well. We confirm our earnings forecast for 2016. Development in the Renewables Division was pleasing. The commissioning of the new offshore wind farms Nordsee Ost and Gwynt y Môr, in particular, had a positive effect on the result. The result for the same period in the previous year still included one-off income from the divestment of the Gwynt y Môr grid infrastructure. The result for this segment is therefore virtually unchanged compared to 2015. Günther explained: ‘Net of one-off effects, the Renewables Division would have posted a much higher result than in the previous year.”