RWE back in the black in second quarter

Germany's second biggest power supplier, said Tuesday it was back in profit in the second quarter, but it would cut 2,400 jobs to boost its competitiveness. RWE said in a statement it booked net profit of 273 million euros ($337 million) in the period from April to June, compared with a loss of 229 million euros a year earlier. That meant that net profit for the first half was little changed at 1.584 billion euros compared with a year earlier. Revenues were more or less unchanged, too, slipping by 1.8 percent to 11.497 billion euros in the second quarter and by 1.3 percent to 27.09 billion euros in the first half. German power suppliers had been hard hit last year by a decision by the German government to phase out nuclear power in the wake of the Fukushima disaster in Japan. Utilities were forced to shut down their profitable large-scale power plants and also pay a tax on the reactors' fuel for their remaining lifespan. The sector appears to be faring better this year. On Monday, RWE's bigger rival E.ON said its bottom line more than trebled in the second quarter, largely thanks to a gas price deal struck with Russian giant Gazprom. RWE negotiated a similar agreement with Norway's Statoil that will "reduce the current burdens and future risks" for the group. Nevertheless, "the present framework conditions are anything but favourable" complained chief executive Peter Terium. "Mounting state intervention in the energy sector, shrinking power plant margins and fierce competition in electricity and gas supply are all challenges we are facing." In response, RWE had decided to intensify its restructuring efforts and would eliminate a further 2,400 jobs on top of the 8,000 jobs already being axed by 2014. Looking to full-year earnings, RWE said it was projecting "near-constant" revenues and "stable" earnings, with operating results forecast to be comparable to the 5.8 billion euros achieved last year and net profit to match 2011's 2.5 billion euros.