RWE AG (RWEOY) Wednesday reported higher profit for the first quarter, on nearly 3 percent rise in revenues. The German utility also confirmed the full-year earnings forecast for 2013 it provided earlier in March.
RWE noted that benefits of the efficiency program and improvements in gas procurement conditions were contrasted by earnings shortfalls in the conventional power generation business. The utility reiterated that these factors would continue to impact business performance for the year as a whole.
The company had cautioned last month that it would be virtually impossible to maintain its earnings level after 2013, amid the difficult outlook for conventional electricity generation.
Net income for the quarter improved to 1.416 billion euros ($1.83 billion) from 1.311 billion euros in the prior year. Recurring net income, the metric used to calculate dividend, rose 0.7 percent to 1.297 billion euros.
Earnings Before Interest, Tax, Depreciation and Amortization, or EBITDA, fell 2.7 percent to 3.042 billion euros. Operating result dropped 4.2 percent to 2.334 billion euros.
External revenue advanced 2.9 percent to 16.050 billion euros from 15.593 billion euros.
The company generated 3 percent more electricity at 62.1 billion kilowatt hours or kWh. Energy usage in RWE's core markets was primarily subject to negative economic effects, while the cold weather increased the need for heating.
Electricity generation from gas increased as the gas-fired power plant at Pembroke was commissioned in September 2012. Electricity generation from lignite declined, as all the German 150 MW units had been decommissioned by the end of 2012. Electricity generation from renewables increased from 3.5 billion to 4.2 billion kWh.
Electricity sales volume declined 4 percent to 70.9 billion kWh as RWE stopped special electricity auctions for industrial customers in Germany at the end of last year.
The cold weather sent RWE's gas sales volumes up 12 percent to 126.9 billion kWh. This affected all markets in Northwestern Europe and was more evident in Germany as distributors purchased higher volumes.
The group expects an operating result in the order of 5.9 billion euros for the year and recurrent net income of around 2.4 billion euros.
Larger rival E.ON AG (EONGY.PK) last week had backed its full-year targets, after first-quarter EBITDA fell 5 percent even as net profit grew.
The stock fell 0.25 percent on Tuesday to settle at 27.61 euros.
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