- RWE reports a 62% fall in first-half profits.
- Energy reforms in Germany have so far not been as comprehensive as initially expected.
- With the substantial rise in the value of the shares since the election, RWE is relatively unattractive against UK and French peers.
- RWE's campaign for its lignite power generation business is unlikely to yield significant improvement to profitability.
- The summer will bring more wholesale power market price weakness. The company needs to reshape completely, which will take a long time.
- The shares trade in line with the sector, and do not justify any premium. After recent strong performance, look for a correction.
- RWE AG is Germany's largest seller of electricity. Therefore, its profitability is heavily linked with the 'Energiewende'.
- This program has induced a huge decrease in electricity wholesale prices and made many of RWE's production facilities unprofitable.
- After the German elections (last September) reform of the 'Energiewende' is realistic. RWE should profit from it.
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