Nuclear tax refund keeps RWE on track for 2017

German energy giant RWE (IOB: 0FUZ.IL - news) on Tuesday said it was confident of hitting the upper targets of its 2017 outlook after a huge nuclear tax refund boosted its nine-month performance.

The Essen-based group recorded a net profit of 2.2 billion euros ($2.5 billion) between January and September, compared with just 11 million euros over the same period last year.

The spike is partly down to a 1.7-billion-euro refund from the German government after the country's highest court ruled in June that a nuclear fuel tax imposed since 2011 was illegal.

Without the one-off boost, adjusted net profit rose to 876 million euros, still nearly four times higher than last year's adjusted figure.

"We are very satisfied with this year's business performance so far," RWE's chief financial officer Markus Krebber said in a statement, highlighting a particularly sound performance in Europe.

While coal-fired power stations "remain under pressure" on the continent, gas-fired power plants "exceeded expectations," RWE said.

Adjusted operating, or underlying, profits grew more than nine percent to 4.1 billion euros over the first nine months, while revenues slipped by 2.5 percent 32.4 billion euros -- beating analyst expectations.

RWE said the nuclear rebate windfall helped lower its net debt from 22.7 billion euros in 2016 to 19.5 billion euros by the end of September.

Looking ahead, the group reaffirmed that it expects to reach "the upper end" of its 2017 forecasts.

It is pencilling in adjusted operating profits of 5.4 to 5.7 billion euros and adjusted net profits of 1.0 to 1.3 billion euros.

Like its main German rival EON (Taiwan OTC: 3411.TWO - news) , RWE has grappled with low wholesale electricity prices in recent years and competition from subsidised renewables.

It has also had to make tough choices in the wake of the German government's decision to move away from nuclear power following the 2011 Fukushima disaster.

RWE has responded to the challenges by spinning off its renewables and power grid businesses into a new subsidiary, Innogy, while keeping its coal, gas and nuclear plants within the original company structure.

Source: AFP