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RWE sees falling profit ahead of Innogy, E.ON renewables deal

Key Points
  • RWE is in the process of taking over the renewable activities of rival E.ON and subsidiary Innogy, turning it into Europe's No.3 green energy group behind Spain's Iberdrola and Italy's Enel.
  • Shares in the group were indicated to open 0.9 percent lower at 0632 GMT, the second-biggest decliners among German blue-chip stocks.
An employee of the energy group RWE stands in the Hambach Forest with a helmet bearing the company's logo. The police and the energy company RWE have started to clear the Hambach Forest.
Christophe Gateau | picture alliance via Getty Images

RWE forecast on Thursday core earnings could fall by a fifth this year, as the utility struggles to halt a decline in profitability at its coal- and gas-fired power plants before becoming Europe's third-largest renewables group.

RWE is in the process of taking over the renewable activities of rival E.ON and subsidiary Innogy, turning it into Europe's No.3 green energy group behind Spain's Iberdrola and Italy's Enel.

At the same time, it is Germany's biggest electricity producer due to its large fleet of coal- and gas-fired power plants, which have come under political and economic pressure in recent years.

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"We want to keep the profitability of our operations in conventional generation stable," RWE Chief Financial Officer Markus Krebber said.

"In view of the variety of challenges, this won't be an easy feat, but we are approaching it with great confidence and enthusiasm."

RWE expects adjusted core earnings of 1.2 billion to 1.5 billion euros ($1.4-$1.7 billion) this year after a decline of 29 percent to 1.5 billion euros in 2018. Adjusted net income is seen at 300-600 million euros, compared with 591 million in 2018.

Shares in the group were indicated to open 0.9 percent lower at 0632 GMT, the second-biggest decliners among German blue-chip stocks.