Bullish indicating open at $55-$60, IPO prices at $37
Investing.com -- RWE (ETR:RWEG) reaffirmed its full-year guidance after reporting a decline in first-quarter income, but ahead of expectations.
Adjusted net income declined to €498 million ($556.4 million) in the first quarter, down from €801 million a year earlier, though slightly above the €473 million projected by analysts, based on company-compiled estimates.
Adjusted EBITDA came in at €1.31 billion, below the €1.71 billion recorded a year ago and just under the €1.32 billion expected by analysts.
“The beat on net income vs consensus looks to be from lower net finance costs, slightly offset by higher minorities,” Jefferies analysts said in a post-earnings note.
The German utility said the decline was in line with expectations, driven by reduced profitability in its flexible-generation unit and a slow start to the year in its trading division. In addition, unfavourable wind conditions in Europe led to lower output from both offshore and onshore wind farms, putting further pressure on results.
By division, onshore and flexible generation outperformed expectations, while supply and trading fell short.
Offshore wind results were in line due to widely anticipated weak wind conditions. Onshore performed 9% above expectations, while flexible generation came in 4% ahead.
Trading was notably weak at €15 million, far below the €100 million consensus and the lowest quarterly result in six years.
RWE maintained its full-year forecast, targeting adjusted EBITDA of between €4.55 billion and €5.15 billion, and adjusted net profit in the range of €1.3 billion to €1.8 billion.
While the guide has been fully reiterated, the Q1 trading miss “might lead to a small downward adjustment” in consensus estimates for the financial year 2025, Jefferies analysts noted.
The company also confirmed plans to raise its annual dividend to €1.20 per share, up from €1.10.
“We expect a broadly neutral market reaction for RWE shares following Q1 results,” Morgan Stanley (NYSE:MS) analysts wrote.
“Results [are] largely vanilla at first glance, with most visible line item being a low trading result,” they added.