Revenue and earnings in the renewables segment of German utility Innogy rose during the first quarter of 2019 as the company gears up to re-integrate renewables into parent RWE once a share and asset swap deal with rival E.ON has been approved by EU competition authorities.
The company’s overall results were, however, dragged down by the sluggish UK retail business and the sale of the Czech gas grid business.
External revenue in renewables rose 2.3% to €265m ($298m) in the first quarter of 2019 compared to the year-earlier period, while adjusted earnings before interest and taxes (Ebit) in the segment surged by 29% to €200m.
The rise was predominantly caused by prices and slight improvement in weather conditions as well as earnings contributed from new wind farms.
Group adjusted Ebit fell 22% to €964m in the first quarter amid a feeble grid and infrastructure business in Germany and Eastern Europe, and a bad performance in retail due to price caps in the UK, higher power and gas prices on wholesale markets, and regulatory intervention in Eastern Europe, Innogy said.
That helped push adjusted group income down to €407m from €610m in the first quarter of 2018.
“Despite the unusual situation in which we find ourselves with the planned transaction between E.ON and RWE, we are continuing to focus on our operational business,” chief financial officer Bernhard Günther said.
“Factors contributing to the improved result for Renewables include a higher market price level and new capacities which were commissioned in 2018. The weather conditions are also somewhat better than in the previous year.”
The new RWE is planned to also include E.ON’s renewable generation assets, which will at once turn the company into one of Europe’s largest renewable energy producers.
Until then, Innogy continues on a stand-alone basis. The utility is increasingly developing solar projects without subsidies. The company is currently building three solar projects with a total capacity exceeding 100MW in Spain and Canada, and has taken a final investment decision on first US solar projects.