RWE awards shareholders a bumper payout as profit rockets higher

 
Courtney Goldsmith
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RWE is set to become one of the largest renewable energy firms in Europe (Source: Getty)

German utility giant RWE has revealed a bumper payout for shareholders after the firm's profit soared in 2017.

The figures

RWE planned a dividend of €0.50 (£0.44) per share in 2017, plus a €1 per share special dividend. The firm's ordinary dividend is expected to rise to €0.70 per share in 2018, and a further rise is also forecast for 2019, which analysts had expected to be flat.

Net income was "substantially higher" in 2017, rising to €1.9bn from a net loss of €5.7bn due to impairments the previous year.

For 2018, RWE expects core earnings and net income to be lower, reflecting the impact of "very low levels of electricity prices seen in past years".

Why it's interesting

On Sunday, RWE and E.On revealed a sweeping deal that would position the former as a renewables-focused business while the latter will specialise in regulated energy networks and customer service. Under the deal, RWE will sell its controlling stake in Innogy to E.On.

The deal will make RWE Europe's third-largest clean power firm behind Italy's Enel and Spain's Iberdrola, and RWE's chief executive Rolf Martin Schmitz said it will "create two focused and fortified companies, which will be successful European players".

The firm's chief financial officer also said E.On will make a €5.2bn voluntary public bid for the minority shareholders of Innogy in the second quarter of 2018.

Markus Krebber said the offer would be made as soon as the German financial services regulator gives clearance for the offer document.

Read more: Utility giants clash with Germany over nuclear policy

What RWE said

Schmitz said: “In 2017, our goal was to strategically reposition RWE and consolidate its finances. We were successful in both of these undertakings."

He said:

We are in good shape again, with a solid financing structure, lower debt and a higher equity ratio. In operational terms, our trading business did well in 2017, along with our power generation activities.

All of this forms a good basis for the future, as we move forward with a sharp focus on our core business: ensuring security of supply.

Read more: E.On unveils a deal to buy RWE's Innogy in a major German energy shakeup

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