German energy giant RWE raises full year target

RWE, Germany's second biggest power supplier, said Wednesday it was more confident about this year's earnings after posting solid profits in the third quarter despite a tricky economic environment. "We are raising our earnings forecast for the full year slightly," said RWE boss Peter Terium in a letter to shareholders. The firm expects underlying profit, as measured by earnings before interest, tax, depreciation and amortisation (EBITDA) and operating profit to be "at least on a par" with the comparable figures of last year, Terium said. Previously the firm had forecast EBITDA and operating profit "close" to last year's levels of 8.5 billion euros ($10.8 billion) and 5.8 billion euros respectively. In a later news conference, board member Bernhard Guenther told reporters the firm also saw "no change for 2013" as far as its profit targets were concerned. RWE had previously said that 2013 operating and net profit would be around the same as last year. In the third quarter, the firm swung to a net profit of 296 million euros, compared to a loss of 174 million euros in the same period last year. Total earnings in the third quarter came to 10.9 billion euros, compared to 10.3 billion euros last year while third-quarter operating profit was up 70 percent. RWE appeared to be performing better than its rival E.ON, which on Tuesday dropped its targets for next year after posting a net loss in the third quarter, sending its stock sharply lower. Energy firms in Germany have been hit hard by Berlin's decision to phase out nuclear power in the wake of last year's disaster in Fukushima, Japan. "Admittedly, we felt significant one-off effects from the U-turn in German energy policy last year," Terium acknowledged. "However, we are also benefiting from operational improvements, for example in the trading business," added the chief executive. Investors seemed cheered by the results, with RWE stock up 1.31 percent in early Wednesday trading, beating the wider DAX market of leading German shares which was slightly in the red.