RWE has announced that 2011 presented a number of fiscal challenges brought about by difficult economic and political conditions.
The German government’s nuclear energy decisions alone had a negative impact on the result of well more than €1bn (£834m). In addition, the gap between the oil-indexed gas procurement prices and significantly lower sales prices on the wholesale market, coupled with persistently low margins in the electricity-generating business, had an adverse effect on business performance.
Declines in all key parameters for the group were as predicted for 2011.
Earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by 18 per cent to €8.5bn (£7.1bn) and the operating result declined by 24 per cent to €5.8bn (£4.8bn).
Recurrent net income — the key determinant of the dividend — fell by 34 per cent to €2.5bn (£2.1bn) and revenue dropped by three per cent to €51.7bn (£43.1bn).
These results are slightly ahead of RWE’s forecast provided in August 2011.
RWE is maintaining its commitment to a payout ratio of 50–60 per cent of recurrent net income. The supervisory and executive boards will propose a dividend of €2 per share at the annual general meeting. This represents a dividend yield of 7.4 per cent, based on the year-end price of the ordinary share.