RWE AG Reports Profit Decline, Boosts Earnings Outlook

RWE AG reported lower earnings for the first nine months of fiscal 2024, reflecting weaknesses in its Flexible Generation and Supply & Trading segments. However, the company has raised its earnings expectations and confirmed a dividend, indicating a potential recovery.

Date: 13-11-2024

AI Rating: 4

RWE AG's report indicates a significant decline in key profitability metrics for the first nine months of fiscal 2024. The adjusted net income dropped from 3.10 billion euros the previous year to 1.64 billion euros. This showcases a sharp decrease in profitability, leading to a negative rating of 4.

Moreover, adjusted EBIT also decreased from 4.27 billion euros to 2.51 billion euros, and adjusted EBITDA fell from 5.71 billion euros to 3.98 billion euros. Such declines suggest challenges within the company's operational segments.

Despite these negative aspects, RWE has set a positive tone by announcing a share buyback program worth up to 1.5 billion euros, starting in the fourth quarter of 2024. This move could signal management's confidence in future recovery and aims to enhance shareholder value.

Furthermore, RWE raised its earnings expectations for fiscal 2024, projecting adjusted net income in the range of 1.90 billion euros to 2.40 billion euros. The company now expects performance to reach the mid-range of forecasts rather than the lower end, attributed to anticipated improvements in its Flexible Generation and Supply & Trading segments. This suggests an attempt to rebound from current lows.

Additionally, RWE confirmed a dividend target of 1.10 euros per share for fiscal 2024, which highlights a commitment to returning value to shareholders despite the challenging earnings environment.

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