The RWE Group, Germany's second biggest power generator, said it has achieved its earnings targets for 2014. The figure achieved at the end of the fiscal year was EUR 1.4 billion, EUR 400 million of which was realised in 2014. That is EUR 250 million more than expected.
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Other positive factors were high revenues from the sale of electricity networks and a very good performance in energy trading. This was not sufficient, however, to offset the decline in earnings from conventional electricity generation, in particular.
Persistently low prices on the wholesale electricity market and the unusually mild weather affected RWE AG's business performance in 2014. The operating result fell as expected to EUR 4.0 billion, a drop of 25% year on year. Conversely, EBITDA was significantly better than planned, at EUR 7.1 billion. The Group’s external revenue declined from EUR 52.4 to EUR 48.5 billion.
RWE achieved its goal of financing capital expenditure and dividend payments entirely from cash flows from operating activities during fiscal 2014 – a year earlier than planned. Overall, it actually achieved a surplus of EUR 1.1 billion. Net debt remained in the same range as in the previous year, at EUR 31.0 billion.
"We are achieving our goals faster and better than expected," says Peter Terium, CEO of RWE AG. "The crisis in conventional power generation continues. In spite of this, we will focus once more on growth opportunities in the future, but without losing sight of the need for strict financial discipline."
On 23 April 2015, the Supervisory and Executive Boards of RWE AG will propose to the Annual General Meeting that a dividend of EUR 1 per share be paid for fiscal 2014. This represents around 48% of recurrent net income.
In future, the dividend policy will be put on a broader footing and the current practice of linking it to a target payout ratio will come to an end. From fiscal 2015, in addition to the actual earnings situation, cash flows from operating activities, debt levels and any potential opportunities for growth investments will be considered when setting the dividend. ■