RWE's profit declines by 22% in 2025, with electricity profit margins returning to normal; announces €35 billion investment plan

Investing.com - RWE AG announced on Thursday that its net profit for 2025 will decline by 22%, due to the return of electricity profit margins to normal levels. The German energy company also announced a €35 billion expansion plan, placing natural gas power generation at the core of its growth strategy.

Adjusted net profit dropped from €2.32 billion in 2024 to €1.8 billion. Adjusted earnings per share fell from €3.12 to €2.48. Adjusted EBITDA decreased from €5.7 billion to €5.1 billion, remaining at the upper end of the company’s guidance.

Use InvestingPro for faster breaking news and analyst reactions - 50% off

CEO Markus Krebber stated: “In a challenging environment, we continue to expand our investment portfolio in a value-adding manner and execute the group strategy.”

The flexible power generation segment saw the largest decline, with adjusted EBITDA falling from €1.95 billion to €1.41 billion, due to the normalization of forward sales profit margins.

Performance in this segment includes a one-time accounting gain of €225 million from the sale of a data center development site in the UK. Excluding this gain, the segment’s earnings would be below its own lower guidance limit of €1 billion.

Revenue from supply and trading operations halved from €679 million to €339 million.

Onshore wind and solar energy segments partially offset the group’s decline, increasing from €1.5 billion to €1.74 billion, thanks to new power plant commissioning and rising unhedged electricity prices in the U.S. Offshore wind energy revenue decreased from €1.56 billion to €1.49 billion due to weaker wind conditions.

Net debt remained stable at €10.9 billion, down from €11.1 billion a year earlier. Equity ratio improved from 34% to 41%. Leverage ratio is 2.1, well below RWE’s self-imposed limit of 3.0.

RWE expects adjusted EBITDA for 2026 to be between €5.2 billion and €5.8 billion, with net profit between €1.55 billion and €2.05 billion, with a midpoint of €2.55 per share. For 2027, the company forecasts EBITDA of €6.2 billion to €6.8 billion, with a midpoint of €3.05 per share.

The company’s goal is to achieve an adjusted EPS of €4.40 by 2031, representing an approximate 12% compound annual growth rate.

Of the €35 billion investment plan, nearly half, or €17 billion, will be allocated to the U.S., with RWE planning to add flexible natural gas peaking capacity beyond renewable energy.

Another €9 billion will be invested in natural gas and battery projects in Germany, including up to 3 GW of hydrogen-ready natural gas plants, depending on government tenders.

RWE proposes a dividend of €1.20 per share for fiscal year 2025, an increase of €0.10, with plans to grow this by 10% annually thereafter.

This article was translated with the assistance of artificial intelligence. For more information, see our Terms of Use.