'We're on the home straight towards the new RWE,' says CEO

CEO Rolf Martin Schmitz upbeat on E.ON share-and-asset deal as 2018 operating profits come in on target

The wide-ranging asset and share swap transaction with rival E.ON is proceeding well and RWE still expects to conclude it in the second half of this year, the German utility’s chief executive Rolf Martin Schmitz said.

"Our operating business is performing according to plan and we have a very good financial basis. We will propose a higher dividend of €0.70 per share to our shareholders,” Schmitz said at the publication of 2018 results.

“The transaction with E.ON is proceeding well and we want to complete it in the second half of 2019. This means we’re on the home straight towards creating the ‘new RWE’, which will have excellent prospects on the global markets."

RWE and E.ON in March 2018 had announced plans for a transaction that – once EU competition authorities have cleared it – would reshape the German energy sector. Under the deal, the renewable (and nuclear) energy generation assets of E.ON and RWE subsidiary Innogy would be bundled under the umbrella of a new RWE, while E.ON would receive the grids and customer solutions businesses of the three companies.

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The deal at once will turn RWE into one of Europe’s biggest renewable energy producers and the world’s second-largest offshore wind operator, but also still leave a swath of lignite and coal power plants with RWE.

EU and German antitrust authorities have already approved RWE’s takeover of the renewables business, but the EU has started an in-depth probe into E.ON’s planned purchase of Innogy’s gas and power retail business.

RWE on a stand-alone basis last year had earnings before interest, taxes, depreciation and amortisation (Ebitda) of €1.5bn, down from €2.1bn a year earlier, but within a forecast range of €1.4-1.7bn.

RWE’s stand-alone adjusted net income fell to €591m in 2018, from €973m in 2017, also within a €500m-800m forecast range.

Both figures were lower than the results registered for the previous year, mainly due to the anticipated decline in wholesale electricity prices, RWE said. Lower generation volumes to the shut-down of the Gundremmingen nuclear power station as part of Germany’s nuclear exit also dented into earnings.

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