RWE is putting the brakes on investment. The energy producer is cutting its spending plan, which runs until 2030, by 10 billion euros to 35 billion euros. This is primarily because of the uncertainty regarding the energy policy framework in the USA, CEO Markus Krebber explained at the 2024 earnings presentation last week.

Last year the Essen-based company invested 10 billion euros in expanding its green generation portfolio, mainly in Europe. But increased uncertainty now required stricter risk management. The return targets for new projects have therefore been increased from 8 to 8.5 per cent. In the USA in particular, where President Trump has positioned himself as an opponent of renewable energies, more caution is being exercised. Krebber explained that investments would no longer be made without authorisation, and clarity regarding returns. Customs policy also plays a role here. In future, every investment will be scrutinised to see whether the required imported goods are already on the market, or whether suppliers will assume the risk. However, the RWE CEO left no doubt about the intrinsic value of the US company Con Edison Clean Energy, which was acquired in 2023.

It is mainly US projects that are under scrutiny. However, Germany is also considered an uncertain area – especially when it comes to the expansion of new gas-fired power plants. Krebber warned that the new German government must quickly create clarity in this regard. If the first auctions were held by the beginning of next year, it would still be possible to connect new power plants to the grid by the end of the decade. However, this would also require faster approval procedures, the RWE boss emphasised.

Despite this, RWE is sticking to its earnings targets for 2030 – at least as far as earnings per share are concerned. Earnings per share are still expected to reach 4 euros in 2030. At the same time, the dividend is set to grow by 5 to 10% annually until then. RWE is already holding out the prospect of a dividend of 1.20 euros per share for the current financial year. For 2024, RWE shareholders can look forward to an increased dividend of 1.10 euros per share. The medium-term plan issued at the end of 2023, which envisaged an adjusted net result of 3 billion euros for 2030, was explicitly not confirmed.

This ultimately depends on the allocation of capital, said Müller. This refers to the possibility of further share buybacks. The current programme of 1.5 billion euros should be completed by the second quarter of 2026. As can be seen from the investor presentation, RWE will have more room for manoeuvre again from 2026 when deciding whether to invest funds or buy back shares.

The changed risk situation also has an impact on the debt policy. Whereas the ratio of net debt to the adjusted operating result before depreciation and amortisation (EBITDA) was previously in a corridor between 3 and 3.5, the upper limit is now 3 times the operating result. At 11.6 billion euros (previous year: 6.6 billion euros), net debt at the end of 2024 was 2 times EBITDA. However, a significant increase is expected by the end of 2025.

This is not least because earnings are expected to fall again in 2025. Adjusted EBITDA is expected to fall by between 10% and 20%. According to the planning, the slump in adjusted net income will be even more pronounced. After plummeting by over 40% to 2.3 billion euros in the past financial year, adjusted net income is expected to be at best 1.8 billion euros in 2025.