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- 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.
Wed, Nov. 26, 11:48 AM
- Germany's utility lobby group BDEW says it sees no room for power plant operators to cut emissions unilaterally without fundamental reform of the power market, it said after talks with Germany's energy minister.
- Germany's government plans to force utilities to lower their CO2 emissions by 4.4M tons each year during 2016-20, as it struggles to meet its self-imposed target to reduce emissions by 40% by 2020 from 1990 levels.
- Major utilities RWE (OTCPK:RWEOY) and E.ON (OTCQX:EONGY), already struggling due to losses from their coal- and gas-fired generation fleet, are likely to be the most affected by the measure.
Fri, Sep. 12, 7:57 AM
- Germany's RWE (OTCPK:RWEOY) is seeking further cost cuts in its conventional power generation business as it continues to fight difficult market conditions, local media are reporting.
- The current savings target for its austerity program is at €800M ($1.03B), which reportedly will be raised by several hundred million euros.
- Like other European utilities, RWE has been struggling with excess power generation capacity as subsidized wind farms and solar plants have come on stream, plus poor energy demand in the weak European economy, have eroded power prices and dragged down earnings.
Thu, Aug. 14, 4:59 PM
- RWE (OTCPK:RWEOY) says it will close three unprofitable power plants, in addition to 10 closures previously announced, because subsidized renewable energies have created an electricity glut in Europe.
- RWE says the latest plant closures would remove 1 GW of capacity from the German market, bringing overall capacity coming offline to nearly 6.3 GW by the end of 2017; the company also has ended power purchase agreements with other utilities with a total capacity of 2.7 GW.
- The impact of the policies was felt in RWE's H1 results, announced today: Net profit excluding one-time items such as asset sales fell 62% Y/Y to €749M, on a 10% decline in revenue to €25.1B.
Tue, Apr. 15, 11:48 AM
- German utility RWE (RWEOY) formally agrees to supply Ukraine with natural gas this year, the first such deal by a European energy company after Ukraine's continuing political crisis put the country's traditional supplies from Russia in doubt.
- RWE says it will begin gas deliveries to Ukraine state-owned energy company Naftogaz via Poland immediately; the gas will be delivered at wholesale price levels, including delivery costs, but RWE does not provide an estimate of the expected volumes.
- Separately, the head of Gazprom (OGZPY) reportedly told a European energy leader that it will continue to provide a reliable supply of natural gas to the European market.
Mon, Mar. 17, 7:55 AM
- German utility RWE (RWEOY) says it reached a preliminary agreement to sell its oil and natural gas subsidiary, RWE Dea, to Russian billionaires Mikhail Fridman and German Khan for €5.1B, or ~$7B.
- The RWE Dea acquisition is the first known oil and gas transaction by the L1 Group, the investment vehicle the oligarchs set up to invest the estimated ~$14B they received for selling their shares of TNK-BP, BP's Russian oil affiliate.
- With worries that Russian natural gas exports to Europe, and particularly Germany, might be cut off amid the crisis in Ukraine, the timing of the sale of German energy assets to Russian investors seems unusual, NYT says.
Wed, Jan. 22, 9:38 AM
- RWE's (RWEOY) Dea oil and gas production and exploration unit has attracted at least three initial bids valuing the business at up to €5B ($6.8B) including debt, WSJ reports.
- But the German utility likely would generate much less cash than that from a deal because the overall valuation includes pension liabilities and debt of more than €700M.
- The highest valuation, at ~€5B, comes from Russian billionaire Mikhail Fridman through his energy investment vehicle L1 Energy; lower bids reportedly have come from Wintershall, the oil and gas exploration unit of German chemicals giant BASF (BASFY), and a consortium of KKR and Kuwait Petroleum Corp.
Nov. 29, 2013, 1:35 PM
- The U.K. government has asked the country's six biggest energy suppliers to freeze prices for gas and electricity, barring any major increase in wholesale fuel costs, until the 2015 election, BBC reports.
- The government seeks the commitment as part of a wider deal with firms that could cut annual bills by ~£50, and it wants to avoid another round of price rises that could be blamed on government green levies.
- Britain's "big six" energy companies, British Gas owner Centrica (CPYYF, CPYYY), SSE (SSEZF, SSEZY), RWE's npower (RWEOY), Iberdrola's Scottish Power (IBDRY, IBDSF), EDF Energy and Eon (EONGY), supply ~98% of the country's homes.
Apr. 5, 2013, 2:30 PMTop German utilities EON and RWE are set to significantly pare back their alternative energy spending, actions bound to further weaken demand in a top solar market that has already been hurt by subsidy cuts. EON plans to lower its clean-energy investments to less than €1B in 2015 from €1.79B in 2012, and RWE plans to cut its annual renewable energy spending by roughly half over the next two years to €500M. | Comment!
Mar. 5, 2013, 10:40 AMGerman utility RWE (RWEOY.PK) says it will sell its oil and gas exploration and production business, which could raise close to €5B ($6.5B) in its drive to cut debt. The move comes as it reports a 28% drop in net profit for 2012, weighed by writedowns on the value of its power plants in Europe, and warns its earnings will remain under intense pressure in the years to come. | Comment!
Jun. 6, 2012, 1:00 PMMaybe what's really hurting Angela Merkel politically are rising electricity costs, up more than 10% with more price hikes to come as the country phases out nuclear energy in favor of trendier sources. Much of the increase is to finance solar subsidies, which Merkel would like to end, but as of yet has been unable to. | 1 Comment
Mar. 29, 2012, 7:00 AME.ON (EONGY.PK) and RWE (RWEOY.PK) scuttle a joint plan to build nuclear power stations in the U.K. worth up to £15B ($23.78B) - potentially damaging the government's stated goal to see new plants by 2025. The German utilities say they made their "strategic decision" because of the slow pace and high costs of the project. | 2 Comments
Feb. 9, 2012, 11:52 AM
Feb. 1, 2012, 11:52 AMAmong the big gainers in Europe are German utilities RWE (RWEOY.PK +4.6%) and E.ON (EONGY.PK +3.6%). RWE received a boost from Morgan Stanley adding the name to its best ideas list. This follows last week's upgrade by JPMorgan. The companies had an ugly 2011, but now sport head-turning double-digit yields. | Comment!
Dec. 13, 2011, 7:42 AME.ON's (EONGY.PK) €3B impairment charge bomb yesterday looks ugly, but can't be a total surprise and might be the sort of "kitchen sink" operation that assures the news can only get better in 2012 and beyond, says the group at CreditSights. Germany's largest utility, it is off 27% YTD, and yields 9.7%. Another German utility, RWE (RWEOY.PK) is off 47% YTD, and yields 14.5%. | Comment!
Dec. 12, 2011, 3:49 PMEON AG (EONGY.PK -6.7%), Germany's largest utility, will book an impairment charge of about €3B due to lower prices and "regulatory intervention" in Italy and Spain. Struggling to bring its cost structure down to deal with Germany's withdrawal from nuclear energy, the company earlier announced job cuts in the 9K-11K range. | Comment!
Dec. 6, 2011, 7:03 AMGerman energy producer RWE (RWEOY.PK) dives 9% in Frankfurt after announcing plans to raise €2.1B in capital through a share sale as it copes with phasing out nuclear power production. "Talks about a looming rating downgrade and the capital increase are over now and the stock has a great chance to perform very well," says an analyst. | Comment!
RWEOY vs. ETF Alternatives
RWE AG is a German electric utilities company based in Essen, North Rhine-Westphalia. Through its various subsidiaries, the energy company supplies electricity and gas to more than 20 million electricity customers and 10 million gas customers, principally in Europe. RWE is the second largest... More
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