UPDATE: RWE 1Q Net Profit Above Expectations, Back '09 Goals
May 14 2009 - 2:40AM
Dow Jones News
German utility RWE AG (RWE.XE), which is targeting Dutch peer
Essent NV in a EUR9.3 billion takeover offer, Thursday reported
above-expectations first-quarter results and reiterated it expects
stable earnings in 2009.
RWE said it still expects earnings before interest, taxes,
depreciation and amortization as well as operating profit to come
in at the 2008 levels.
Recurrent net profit in 2009 is also expected to match the
EUR3.37 billion achieved last year, Essen-based RWE said.
RWE also Thursday said net profit in the first quarter came in
at EUR1.75 billion from EUR809 million a year earlier. The figure
exceeded the EUR1.37 billion forecast by 16 analysts polled by Dow
Jones Newswires.
Recurrent net profit adjusted for non-recurring items, such as
last year's impairment charge of more than EUR600 million related
to the initial public offering of its U.S.-based water unit
American Water Works Co (AWK), came in at EUR1.51 billion from
EUR1.42 billion a year earlier, exceeding the EUR1.44 billion
forecast by 16 analysts polled by Dow Jones Newswires.
Operating profit rose 4.8% to EUR2.62 billion from EUR2.5
billion. Analysts had forecast EUR2.55 billion.
RWE said operating earnings were driven by exceptionally high
profit contributions from its trading business and gas midstream
activities of RWE Supply & Trading.
Analysts said the results demonstrate RWE is currently faring
better through the economic crisis than competitor E.ON AG
(EOAN.XE) which reported a 5% fall in operating profit
Wednesday.
Still, RWE's result aren't quite as good as they look at first
glance, said WestLB analyst Peter Wirtz, who rates RWE as
neutral.
Wirtz said the power generation business performed slightly
worse than expected due to lower electricity sales volumes
reflecting weak demand in the recession.
He added that the RWE Supply & Trading result was boosted by
the absence of a non-recurring effect related to the revaluation of
gas derivatives used to hedge supply agreements. The revaluation
reduced last year's first quarter result by around EUR110
million.
First-quarter sales rose more than 8% to EUR14.52 billion from
EUR13.40 billion, above analysts forecast of EUR13.69 billion.
RWE's shares have lost around 25% in value over the past 12
months, outperforming its Dow Jones Euro Stoxx Utilities peer
group. They closed Wednesday at EUR58.45.
Company Web site: www.rwe.com
-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503;
jan.hromadko@dowjones.com