In the first three quarters of 2015, the RWE Group’s EBITDA was down 6% year on year to €4.4 billion and its operating result decreased by 9% to €2.6 billion, as expected. The main reason for this was the price-induced shrinkage of margins in conventional electricity generation. The Renewables Division recorded a marked improvement in earnings: the operating result earned by RWE Innogy rose by €251 million to €280 million year on year. This was due in particular to the commissioning of the new wind farms Gwynt y Môr off the coast of North Wales and Nordsee Ost near Heligoland. “RWE Innogy is really taking off now – from a small seed three years ago it has become a model of success,” said RWE AG CEO Peter Terium. “Innogy’s success is both an inspiration and a goal for our other innovative business models.”

In the energy supply business, which contributed €594 million to the operating result throughout Europe (previous year: €605 million), gas volumes benefited from the cooler weather compared to the corresponding period last year. A counteracting effect was felt due to substantial unexpected burdens imposed by operational and technical problems affecting energy supply in the UK. Full consolidation of the Slovak energy utility VSE from the end of August had a positive one-off effect on the Group’s earnings. Prior to the change in accounting treatment, a revaluation of the investment revealed a hidden reserve of €185 million. Adjusted net income (previously: recurrent net income) was down 29% to €545 million. In addition to the significant deterioration in operating earnings, the increased effective tax rate also came to bear. In the accounts for fiscal 2015, however, the effective tax rate should be well below the current level.

External revenue posted a marginal increase, rising to €35.4 billion (+0.3%).

Significant decline in net debt due to sale of RWE Dea

With effect from 30 September 2015, the RWE Group’s net debt amounted to €25.8 billion, which was much less than as of 31 December 2014 (€31.0 billion). The main reason for this was the disposal of RWE Dea, which had an impact of €5.3 billion, including the interest on the sale price. Further disposals had a total debt-reducing effect of €1.0 billion, such as the divestment of the grid connection of the new offshore wind farm Gwynt y Môr and a reduction of RWE’s stake in its Czech subsidiary RWE Grid Holding. The increase in the discount rates used to calculate pension provisions, reflecting the most recent developments in market interest rates, also contributed to the decline in net debt.

Electricity generation up 2%

In the first three quarters of 2015, the RWE Group produced 154.9 billion kilowatt hours (kWh) of electricity, 2% more than in the same period in 2014. One of the contributors was its new 1,554 megawatt (MW) hard coal-fired power plant near Eemshaven in the Netherlands. Its two units started commercial operation on 1 May and 1 July 2015, respectively. The expansion of the Group’s wind power capacity and high wind levels also contributed to the increase in electricity production. A counteracting effect was felt from the fact that RWE no longer uses some third-party German hard coal-fired power stations with a total capacity of 2,412 MW, because the underlying contracts expired and were not extended.

Electricity sales volume on a par year on year, gas supply volume up 12%

The volume of electricity supplied to external customers during the first nine months of the year totalled 191.8 billion kWh, nearly exactly as much as in the same period last year. While the Group achieved gains in sales to industrial and corporate customers, partly because it won new customers, it experienced a decline in deliveries to German distributors.

The gas sales volume rose by 12% to 207.2 billion kWh. The fact that the winter and spring of 2015 were colder than last year in all key RWE markets came to bear here.

Capital expenditure down substantially

At €1.9 billion, the RWE Group’s capital expenditure was 17% lower than the figure recorded in the equivalent period last year. There was a substantial decrease in spending in the Conventional Power Generation Division, which last year still focused on two new hard coal-fired power stations, one at Eemshaven in the Netherlands and the other at Hamm in Germany. Capital expenditure in the Renewables Division also declined significantly. It was mainly dedicated to the new offshore wind farms Nordsee Ost (295 MW) and Gwynt y Môr (576 MW).

Headcount unchanged despite streamlining

RWE had 59,777 people (converted to full-time equivalent figures) on its payroll as of
30 September 2015, roughly as many as at the end of 2014 (59,784). On balance, operating changes caused 1,468 employees to leave the Group, with streamlining measures playing a central role, especially in the Conventional Power Generation Division. A counteracting effect was felt by the first-time full consolidation of the Slovakian VSE Group, which added 1,565 employees. The completion of the sale of RWE Dea in March has not had an effect on personnel in 2015, as the Group stopped reporting the employees of that company at the Group level from the middle of 2014.

Outlook for the Group unchanged

RWE confirms the forecast for its business trend this year, which it published in March, insofar as it relates to the Group as a whole. As before, for the 2015 fiscal year it anticipates EBITDA of €6.1 billion to €6.4 billion and an operating result of €3.6 billion to €3.9 billion. It also expects to achieve the previously communicated adjusted net income of €1.1 billion to €1.3 billion, even if only just.