The weather leads to failures of wind turbines and high electricity prices.
The DAX group announced this late on Thursday. In order to be able to meet its own delivery obligations, RWE currently has to purchase electricity volumes at exceptionally high prices after the Public Utility Commission of Texas instructed the Electric Reliability Council of Texas (ERCOT) to set scarcity prices.
As a result, the result (EBITDA) of the Onshore Wind / Solar segment is expected to be burdened with a total of low to mid three-digit million euros in 2021. A final assessment of the actual effects is not yet possible at the current time.
RWE purchases liquefied gas from Woodside in Australia
The energy supplier RWE wants to expand its business with liquefied natural gas (LNG). To this end, he has signed a supply contract with the Australian LNG producer Woodside for 0.84 million tons per year from 2025.
The agreement has a term of seven years and is not dependent on a final investment decision for a project, said the Essen-based Dax group.
The aim is to expand trade in the Asia-Pacific and Atlantic regions. Woodside now wants to expand its Pluto processing plant in the Scarborough gas field off the coast of Western Australia to include a second LNG production line, said Development and Marketing Vice-President Meg O’Neill.
In October 2020, RWE and Woodside also signed a letter of intent for hydrogen. Both companies therefore want to check whether the gaseous energy source can be marketed to RWE customers in Asia and Europe.
Barclays lowers target for RWE to 41 euros – ‘Overweight’
The equity reaction is likely to be negative but likely to be exaggerated. RWE is already significantly undervalued.
This is how the RWE share reacts
The paper was able to iron out the minus of almost three percent in early trading during the further course of the day and closed slightly in positive territory. RWE is active in Texas with wind turbines, the energy company is threatened with hundreds of millions of euros in charges due to the icy weather there.
Because of icing and network problems, some of the wind turbines on site were out of order, the Essen company announced. Since RWE has also already sold part of the production from these plants, the group now has to buy electricity “at exceptionally high prices” in order to meet its delivery obligations.
The bottom line is that the operating result (Ebitda) of the group segment could be burdened with a low to mid three-digit million euro amount.
The expected burden amounts to around ten percent of his estimate for the Ebitda at group level this year. He therefore lowered the fair value for the RWE shares by 2 to 40 euros. However, he rated the event as a one-off event and falling prices as buying opportunities.
The burdens are certainly “clearly negative”, but ultimately a singular event. According to the expert, RWE’s share price has come under excessive pressure in the past few weeks, burdened by high payments at an auction of British offshore wind projects. From the recent high of the shares at the beginning of February at 37.55 euros, they had recently fallen by almost 14 percent.
With these losses, the technical situation has also darkened: On Wednesday, the price slipped below the 200-day average for the first time since May last year. This is considered an indicator of the longer-term trend.
The Texas ice wind is a buying opportunity”.
DJG / once
ESSEN (Dow Jones) / (dpa-AFX Broker)
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RWE shares close slightly positive territory Extreme weather Texas weighs results