RWE is making swift progress on implementing its Growing Green strategy. The company expanded its green portfolio by 4.9 gigawatts (GW) with investments of €8.0 billion in the first quarter of 2023 alone. The €6.3 billion acquisition of Con Edison Clean Energy Businesses in the US represented the largest share of the investments. In addition, RWE acquired a hydrogen-ready gas-fired power station in the Netherlands and took over British solar developer JBM Solar. In the first months of the year, RWE also invested strongly in new wind and solar facilities, and commissioned further plants. Compared to the first quarter of 2022, RWE’s green portfolio grew by an impressive 7 GW.
Additional facilities with a capacity of 6.8 GW are currently under construction. The largest individual projects are offshore wind farms Sofia off the UK coast, at 1.4 GW, and Thor in Denmark, at 1 GW. Onshore, too, RWE is pressing ahead on the expansion of wind power with more than 17 projects totalling 0.6 GW in Europe and the US. Solar energy currently represents the largest share of new-build projects, at 2.7 GW, mainly in the US. In addition, RWE is expanding its global battery storage portfolio, with projects totalling 0.9 GW under construction in Germany, the US and the Netherlands.
Michael Müller, Chief Financial Officer of RWE AG: “The continuous construction of new renewable energy facilities and our acquisitions are paying off. In the first quarter of 2023, we generated 14% more green electricity than in the same period last year. And we have the financial resources to continue investing strongly in organic growth this year. Our project pipeline is well filled, and the forthcoming auctions open up further attractive opportunities for us.”
Strong results in the first quarter of 2023: In the first quarter of 2023, RWE achieved an adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) of €2.8 billion at Group level, and an adjusted EBITDA of €2.3 billion in its core business. Earnings for the first three months are thus well up year on year. Adjusted net income rose to €1.7 billion.
The increase in earnings year-on-year is primarily due to higher earnings from international power generation in the Hydro/Biomass/Gas segment. In addition, the previous year’s earnings were impacted by charges from sanctions on hard coal from Russia in the Supply & Trading segment. Furthermore, the additional generation capacities based on renewable energies contributed to the strong result.
The outlook for fiscal 2023 as a whole and the dividend target of €1.00 per share for the current fiscal year have been confirmed.
Business performance in the first quarter of 2023 by segment
Offshore Wind: Adjusted EBITDA in the Offshore Wind segment was €473 million, compared to €420 million in the first quarter of 2022. The increase in earnings is due to the commissioning of new capacities in the form of the Triton Knoll wind farm off the UK coast, and Kaskasi off the island of Heligoland.
Onshore Wind/Solar: Adjusted EBITDA in the Onshore Wind/Solar segment amounted to €247 million, compared to €318 million in the first quarter of 2022. The decline in earnings is mainly due to lower realised electricity prices. Additional earnings were recognised from the acquisition of Con Edison Clean Energy Businesses in the US which has been fully consolidated since 1 March 2023, and the commissioning of new wind and solar farms.
Hydro/Biomass/Gas: Adjusted EBITDA in the Hydro/Biomass/Gas segment increased in the first quarter of 2023 to €1,177 million compared to €263 million in the previous year. This is mainly the result of higher earnings from short-term optimisation of the dispatch of the international generation portfolio and higher generation margins.
Supply & Trading: At €289 million, adjusted EBITDA in this segment speaks to an excellent trading performance. This figure is markedly up on the previous year’s figure of -€550 million and is due to the fact that in the first quarter of 2022 sanctions on coal deliveries from Russia led to an impairment of about €850 million.
Coal/Nuclear: Adjusted EBITDA in the Coal/Nuclear segment was €496 million, compared to €207 million year-on-year. This can be attributed mainly to higher margins. Electricity production was sold forward at higher prices than in the previous year. In addition, the Emsland nuclear power plant contributed to earnings until its shutdown on 15 April 2023.
Solid financial situation continues despite strong investment activity: As at the reporting date of 31 March 2023, RWE reported net debt of €5.7 billion. The company assumes that its leverage factor, which shows the ratio of net debt to adjusted EBITDA, will stay well below 3.0, which is the upper limit set by the company.
Key figures at a glance
*Some prior-year figures restated, as in particular the impairment of around €850 million on contracts relating to hard coal purchases from Russia was initially considered in the non-operating result in the first quarter of 2022. This effect is now recognised in adjusted EBITDA.