By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF (Reuters) – Core profit at Germany’s biggest utility RWE jumped 82% in the first nine months, thanks to its commodity trading business and improved margins for its gas-fired power plants, the group said on Tuesday.
Shares climbed 1.9% in morning trading and were among the top gainers in Germany’s blue-chip index.
Still, the stock is down around 11% in the year to date.
Brokerages, including Deutsche Bank and Jefferies, called the results strong, and noted a capital markets day scheduled for the end of the month is expected to be a significant catalyst with regard to the group’s renewables strategy.
The utility, which earlier this year acquired the clean energy business of Con Edison for 6.3 billion euros, said its generation portfolio grew by 5.7 gigawatts between January and September.
“This has led to a significant increase in electricity production from renewables, which contributes to our growth in earnings,” finance chief Michael Mueller said in a statement.
“This positive trend will continue; we currently have projects representing around eight gigawatts under construction worldwide.”
Goldman Sachs said any portfolio developments could trigger a “major re-rating in multiples”, singling out the group’s lignite division, which some investors have said should be carved out.
RWE confirmed its outlook and still expects adjusted EBITDA of 7.1 billion to 7.7 billion euros ($7.6 billion to $8.23 billion) and adjusted net income of 3.3 billion to 3.8 billion.
The group confirmed plans to pay a dividend of 1.00 euro per share for 2023, up from 0.90 euro in the previous year.
($1 = 0.9353 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Miranda Murray and Bernadette Baum)
