RWE’s Increased Gas Sales Not Enough to Offset Issues in Electricity Generation

The increase in gas sales in Europe had a positive effect on RWE’s earnings, but not enough to offset the on-going issues in conventional electricity generation.

‘For the first time since the Federal Republic of Germany was established, in other words, in more than 60 years, the Essen-based energy provider has posted a net loss amounting to – EUR 2.8 billion. This is attributable to impairment losses of some EUR 4.8 billion, which RWE had to recognise for the full year, mainly in respect of its power plant fleet,’ reads a note released on Tuesday.

According to the company, weather conditions prompted a 9% increase in total gas sales, to 335.0 billion kWh.

RWE also reported exploration costs higher than expected during 2013 in its upstream division, while its midstream division registered convincing results.

‘As expected, RWE Supply & Trading increased its operating result substantially, by EUR 1.4 billion, to EUR 831 million. The arbitral ruling on the gas procurement agreement with Gazprom at the end of June was a major contributing factor here. However, the division was not able to match the performance posted in energy trading in the previous year,’ reads a note.