ESSEN (dpa-AFX) - The energy group RWE continues to expect pressure on earnings in 2024 due to the recent fall in electricity prices. The management confirms its forecasts, the company announced in Essen on Thursday morning. RWE had already announced a month and a half ago that in the current year only the lower end of the target range of 5.2 to 5.8 billion euros as adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) published in November on the occasion of a capital market day is likely to be achieved. This corridor continues to apply despite the sharp fall in electricity prices since then, the company said on Thursday. RWE also confirmed its preliminary figures and medium-term targets. The share price rose.

The share price gained 1.3 percent to 32.16 euros in early trading. The losses accumulated by the DAX stock in 2024 have thus been reduced slightly to just under 22 percent.

JPMorgan analyst Javier Garrido referred to information in the investor presentation, which RWE used to provide more transparency with regard to its medium-term forecasts. For example, the slides provide information on how sensitive the yields from wind and solar energy are to electricity prices. He was also reassured by the prospects for income from flexible generation capacities.

He also noted that management was showing the target figure for adjusted earnings per share for 2027 and 2030 and not for adjusted Group earnings overall. This is reassuring in terms of the impact of future financing options.

However, the earnings situation in the current year depends largely on how the business activities of the subsidiaries develop, as RWE explained in the annual report. Accordingly, earnings from energy trading are likely to be "significantly" below the level of 2023. The same applies to the commercial improvement of power plant dispatch.

In contrast, the Essen-based company expects positive impetus from the commissioning of new wind and solar parks. However, the management only expects an improvement in operating profit for onshore plants. By contrast, the earnings contribution from offshore wind power is also likely to decline, as RWE has sold the electricity generated at lower prices on the forward market.

In general, RWE expects demand for electricity in the Group's key markets of Germany, the UK, the Netherlands and the USA to recover somewhat following last year's declines. However, even if energy prices were to rise again, RWE would not be able to match last year's results with the current forecast range.

In day-to-day business, profit in 2023 rose by a third compared to 2022 to just under 8.4 billion euros. The preliminary figures for 2023, which were also announced at the end of January, were thus confirmed. At the bottom line, profit rose even more strongly, from just under EUR 1.5 billion to just over EUR 2.7 billion.

As already announced, shareholders are to receive a dividend of €1.00 per share. RWE is planning an increase of 10 cents in the current year./lew/niw/men