Bad Weather Hits Innogy’s Economics

Image for illustrative purposes only. Source: RWE

Innogy reported an adjusted EBIT of EUR 1,553 million in the first half of 2018, 10% less than in the same period last year, said to be influenced by the negative weather effects on the Renewables division.

Due to wind levels being below the long-term average, the company’s adjusted net income also decreased by 23%, amounting to EUR 662 million in H1 2018.

Innogy produced about 6TWh of electricity, 5% more than in H1 2017, with 4.8TWh coming from renewables, of which 77% was produced by offshore and onshore wind farms.

The company’s capital expenditure rose by 36% year on year to circa EUR 900 million. Taking divestitures into consideration, net capital expenditure amounted to about EUR 726 million of a planned total of some EUR 2.5 billion for 2018.

Investments in renewables in the first half of the year mainly focused on offshore and onshore wind projects in the UK, as well as onshore projects in Italy and the US.

In the first six months of 2018, innogy launched the Galloper offshore wind farm into operation in March, and shortly after secured the rights to build and operate the 325MW Kaskasi offshore wind project in the German North Sea.

As reported earlier, RWE reached an agreement with E.ON to sell its 76.8% stake in innogy in return for receiving an effective participation of 16.67% in E.ON. E.ON recently secured an additional 9.4% share in innogy, and will, once the transaction is finalized, transfer to RWE most of its renewables business, with RWE also receiving the entire innogy renewables business.

“The transaction announced by E.ON/RWE will certainly remain a focus for us. As agreed with E.ON and RWE, we will set up integration teams to make use of the time before a potential closing of the planned transaction and to prepare ourselves as well as possible for a fast and smooth future integration,” said Bernhard Günther, innogy CFO.

“With regard to growth projects, we are about to close a partnering deal for our offshore project Triton Knoll, which has a total capacity of 860 MW. Having passed this important milestone, we can then focus on construction in order to deliver the project for full commercial operation in 2021. Nevertheless, we observed a continuation of the low wind levels, that we already faced in the second quarter, in the first weeks of the second half of the year.”

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