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German energy giant RWE has reported falling first quarter revenues, which it has partly blamed on a “significant” decline in customer numbers at its UK supply business Npower in 2015.
The group generated revenues of around €13.7 billion (£10.8 billion) in the first three months of 2016, a year-on-year decrease of 5.9 per cent. Meanwhile, EBITDA increased by 4.9 per cent to €2.3 billion (£1.8 billion).
RWE said the fall in the revenues was “in part attributable to the supply business in the United Kingdom” where there was a “significant reduction in the number of our residential customers over the course of last year”.
It said some customers could only be retained by offering them tariffs with “more favourable conditions” but said the situation had “stabilised somewhat” since the beginning of this year.
The company added that weakening pound relative to the euro had also hit its UK supply revenues, although it had benefitted from falling wholesale gas and power prices as well as a reduction in the expenses incurred to implement the Energy Companies Obligation (ECO).
Credit for the increase in profits was mainly bestowed upon the group’s energy trading operations, which made “an unusually high earnings contribution”. RWE said its EBITDA forecast for 2016 remained unchanged from March at between €5.2 billion (£4.1 billion) and €5.5 billion (£4.4 billion).
Chief financial officer for the group Bernhard Günther said: “Overall we have achieved a thoroughly respectable result for the first quarter. Our three future-oriented divisions – renewables, grids and retail – are developing well. We confirm our earnings forecast for 2016.”
Towards the end of last year the group announced it was following in the footsteps of Eon by splitting in two – spinning off renewables, grids and retail into a separate business.
The new company – temporarily named RWE International SE – began operating at the start of April. RWE said a definitive name will be announced in the summer and that an initial public offering will take place before the end of the year, with the aim of increasing the company’s capital by around 10 per cent.
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