German utility RWE reported strong first half results and announced a special dividend.
The company was boosted by good performance from its supply and trading division along with a $1.9bn payment from the German government.
RWE´s bottom line for the first six months of 2017 benefited from a $1.7bn tax rebate and around $200m in the refund of associated interest charges.
The electricity company said it would use the refund to pay a special dividend of €1 per share, to run alongside an ordinary dividend of €0.50. Some of the funds will also be used to reduce debt.
It follows the German high court´s ruling in June that a tax previously levied on the German nuclear industry was unconstitutional. Germany´s nuclear operators, including RWE, Eon and EnBW, paid €6.3bn as a result of the tax between 2011 and 2016.
The trio were compelled to pay €145 per gramme of the fuel rods used in their nuclear reactors.
RWE chief executive Dr. Rolf Martin Schmitz claimed the utility was on course to deliver earnings at the upper end of its forecasts for the fiscal year. The company has guided earnings before interest, tax, depreciation and amortization (EBITDA) to fall in the range of €5.4bn-€5.7bn for 2017.
“The key indicators also demonstrate that our financial situation provides us with a solid foundation for the future. And we made the right decisions in defining our strategy,” said Schmitz.
EBITDA for the first half of the year stood at €3.2bn, a 7% increase on the €3bn registered for the same period of 2016, with all business segments making positive contributions.
Net income came in at €2.7bn compared with the €457m for the first half of 2016, boosted by both the nuclear fuel rebate and the stronger business performance.
EBITDA from the supply & trading segment swung to a positive €131m, with the division having reported a loss in the year-ago period.
Security of supply
Schmitz made special reference to projects such as that being pursued at its UK Tilbury power station, in line with plans to construct gas-fired power stations and battery storage facilities.
In the Netherlands, meanwhile, RWE has been retrofitting power plants for the use of biomass, as it positions the business to benefit from state subsidies.
“We used the first half of this year to further develop our company, in line with our strategy. These efforts include forward-looking projects intended to successfully position the company to achieve our main aim of ensuring security of supply,” said Schmitz.
The RWE results follow similar strong performances from Eon and EnBW, which have also benefited from the nuclear tax refund.
Last week, Eon pledged to raise its dividend in 2018 after having been repaid around €2.85bn from the German government. Eon´s operating cash flow rose to €4.9bn for the first six months of 2017 versus €1.7bn for the year-ago period.
In July, EnBW reported a 10.9% increase in first-half profits, with EBITDA of $1.24bn.