RWE slips in Frankfurt after the results, but confirmation of guidance and a dividend hike aren't enough.

(Il Sole 24 Ore Radiocor) - Confirming its 2025 targets and increasing its dividend to 1.2 euros per share are not enough to support RWE stock. The German energy giant fell approximately 3.5% on the Frankfurt Stock Exchange, as falling profits and revenues disappointed the market. Shares are trading at 34.26 euros, the lowest level of the day, while the DAX 40 is rising. In the six months to December, RWE reported net income of 1.45 billion euros (from 4.16 billion in the same period last year), adjusted net income of 0.8 billion euros (from 1.36 billion), and revenue of 10.058 billion euros (from 11.21 billion euros). It should be noted, however, that adjusted net income per share was 1.06 euros, meaning that RWE has already achieved half of its 2025 fiscal target of 2.10 euros per share.

The company attributed the expected decline in earnings primarily to the normalization of revenues in the Flexible Generation segment and the weak business performance recorded to date. Furthermore, unfavorable weather conditions in Europe resulted in lower offshore and onshore wind generation compared to last year, impacting earnings, and the commissioning of new onshore wind farms, solar plants, and battery storage systems had a positive impact.

Not even the vote of confidence and optimistic words from CEO Markus Krebber are supporting the stock: "We can look forward to the first half of 2025 with satisfaction. Having achieved half of our annual target for adjusted earnings per share, we confirm our forecast and our dividend target for 2025. Our long-term goal is to increase adjusted earnings per share to 4 euros by 2030. The expansion of our portfolio, which creates added value, is proceeding rapidly. Of the 11.2 gigawatts currently under construction, we will put more than 3 gigawatts into operation in the second half of the year," he said.

More specifically, RWE confirmed its forecast for the current year and continues to expect adjusted EBITDA between €4.55 billion and €5.15 billion and adjusted net income between €1.3 billion and €1.8 billion. This equates to €2.10 per share, based on the midpoint of the range. RWE expects to achieve adjusted net income per share of approximately €3 by 2027. For 2030, the target remains unchanged at approximately €4 per share.