On March 5, RWE announced it earned EUR 9.3 billion EBITDA and EUR 6.4 billion operating profit in 2012, both up 10% from 2011. Recurrent net income was EUR 2.5 billion, flat with 2011.
All profit measures exceeded our expectations as a result of better-than-expected performance from German power generation and the U.K. operations. Management’s key announcement was the plan to exit the upstream oil and gas business and look for a way to sell all of its shares in RWE Dea, contributing to its EUR 7 billion divestment program.
That unit produced 30.8 million barrels of oil equivalent in 2012, down 3% from 2011. But operating profits were up 23% to EUR 685 million, representing 11% of RWE’s consolidated operating profits. Reserves as of year-end were 122 million cubic meters of oil equivalent.
Operating profits in the United Kingdom rose 34% with significant help from favorable weather and currency moves. Operating profits for RWE’s German power generation segment climbed 13% primarily because of the absence of one-time expenses incurred in 2011 related to Germany’s nuclear plant phaseout legislation. Management confirmed it plans to recommend a EUR 2 per share dividend, the same as 2011 following a 43% cut, and reaffirmed its operating profit guidance of EUR 5.9 billion for 2013.
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