Utility RWE AG said Thursday its second quarter net profit fell 67 percent because of a strong performance last year, one-time effects this year and higher expenses related to carbon dioxide emissions.
The Essen-based company also reiterated its downward profit outlook for 2008 because of charges related to the initial public offering of its American Water unit.
RWE said net profit in the April-June period fell to euro347 million (US$517 million) from euro1.1 billion a year earlier.
Total sales, however, rose 22 percent to euro11 billion (US$16.4 billion) in the second quarter from euro8.5 billion last year.
Second quarter pretax profit fell 33 percent to euro807 million (US$1.2 billion) from euro1.2 billion compared with last year.
"The prerequisites for a successful fiscal 2008 are still good, although these interim financial statements do not reflect this yet," chief executive Juergen Grossmann said in the company's report.
"We will see most of this success reflected in ... figures in the second half of the year," he added.
Reiterating a previous forecast, he said that "in 2008, however, our trading activities are unlikely to match the unusually strong performance achieved last year."
RWE's weaker earnings were a result of its discontinued operation, American Water, which it intends to fully divest and didn't include in the current earnings. RWE announced its intention to float the company in 2006 and has thus far sold off about 40 percent, generating proceeds of about euro1.3 billion (US$2 billion). American Water is one of the biggest water utilities in the U.S.
Part of the declines in earnings were also a result of the company having to buy more CO2 emission certificates than it had to buy a year ago. RWE spent euro583 million (US$869 million) in the certificates in the first half, compared to just euro37 million in the first half of 2007.
"At the end of July, emissions allowances for 2008 were quoted at euro22 (US$33) per metric ton of CO2. We expect that prices will continue to be high," RWE said.
During the first half, the company sold 162 billion kilowatt hours of electricity, a 3.3 percent increase over the 157 billion hours sold a year ago.
Gas sales were up 4 percent to 183 billion kilowatt hours from 178 billion a year ago.
Total sales for the group during the first six months were up 13 percent to euro25 billion (US$37.3 billion) from euro22 billion a year ago.
First half net profit fell to euro1.2 billion (US$1.8 billion) from euro2.6 billion a year ago.
RWE said higher energy sales came from more industrial and household demand, with gas seeing the steepest rise.
The company said gas sales in Germany rose 9 percent, in the U.K. 5 percent and 11 percent in the Czech Republic. Electricity sales also rose with a 1.5 percent increase in Germany, and 2 percent in the U.K., Slovakia and Poland.
Meanwhile, the company said costs increased sharply for commodities across the board.
Coal prices, were more than double what they were during the first half of 2007, while oil prices averages were more than 72 percent over the prior year's level. In the firs half of 2008, gas prices were 20 percent more expensive than in 2007.
Shares of RWE were up 1 percent at euro74.40 (US$111) in Frankfurt morning trading.
___
On the Net:
No comments:
Post a Comment