CMD: RWE is thinking big and there's no stopping it

The German giant, which has become more American-European since the ConEdison integration this year, is stepping up its 2030 targets by raising its global ambitions for the deployment of renewable capacity from 50GW to 65GW installed. While the previous target had been sounding a bit modest given the group’s solid financial footing, this new plan may seem ambitious at a time when the competitors have recently revised their renewable energy growth targets downwards.

9M23: Earnings in line, full year guidance confirmed

A solid set of results driven by a strong Supply and Trading performance mostly impacted by a base effect in 2022, and a residual lagging effect due to forward contracts hedged last year at attractive prices. The commissioning of new onshore capacity and the consolidation of the 3GW portfolio from on Edison Clean Energy Businesses, Inc. in the Q1 had a positive impact which was nevertheless mitigated by unfavourable weather conditions and lower achieved prices.

H1 23: Robust earnings, increase in the guidance confirmed

Without surprises and in line with the preliminary figures published on July 25, RWE reported robust earnings with an EBITDA of €4,540m for H1 23, marking a substantial 113% increase compared to vs €2,124m in H1 22. As a result, RWE announced an increase in its guidance for FY 2023.

Q1-23: Despite the significant investment in renewables, earnings were driven by hydro/biomass/gas.

A strong set of first quarter results with RWE reporting material progress in the different business units and particularly in hydro/biomass/gas, as well as in the supply & trading activities. Despite the additional green capacities installed further to the acquisition of Con Edison Clean Energy in the US notably, the group didn’t manage to post a significant rise in this onshore wind/solar segment, given the lower electricity prices combined with lower wind resources and regulatory intervention

FY2022: More green investments, but black lignite remains the weak spot

As expected, RWE published a historical set of results after a record year characterised by unprecedented volatility in the commodities markets but also thanks to the commissioning of new renewable assets in wind and solar. There was a 22% rise in power generated from renewables in 2022 despite wind speed remaining below its long-term average. The main challenge in 2023 for the German energy giant will be to deliver a 11% increase in the dividend to €1/share against a backdrop of normalising ene

Q3 22: Nothing can stop RWE

RWE posted another good quarter, reporting strong results in the core-business mainly driven by growth in the hydro/biomass/gas segment but also the supply and trading activities. Again, RWE confirmed that, like for other German utilities, it is one of the biggest beneficiaries of the volatile and soaring energy markets and this third quarter was no exception to the rule. Mild weather during the autumn supported the energy supply in Europe as gas could remain in storage, in reserve for the comin

H1 22: cash galore confirmed

RWE confirmed the strong performance at the EBITDA level unveiled two weeks ago. The half-year net income is already on a par with the last full-year, and up 80% yoy. We note a strong positive on the net cash position, which improved from €0.4bn to €1.9bn over a six-month period. Trading activities and merchant generation are the obvious drivers. Consequently, the guidance was materially upgraded: +38% for EBITDA, +57% for net income. In other words, a cash machine.

Q1 22: (almost) as if nothing had happened

RWE released a strong set of results, ahead of expectations, pushed one more time by the Supply & Trading segment. The group is managing its operations well amidst a difficult environment, thus providing reassuring signals. The only cloud was a €850m write-off related to a Russian hard coal contract. Threats of windfall taxes in Germany seem low risk for now.

FY21: coal is cool

RWE confirmed its FY21 solid results unveiled in mid-February, as well as its guidance for 2022 even if it does not reflect the war in Ukraine yet. More importantly, the group provided visibility on its (relatively low) exposure to Russia and the flexibility of its thermal fleet. Even if liquidity is not a problem yet, this is particularly due to coal plants that should become the group’s new cash cow in 2022. In short: long RWE, but be careful of regulations…

Nuke optionality

What if the best solution for the energy transition were … nuclear power? Nuke is back at the heart of political debates in the context of the current energy crisis and massive but insufficient investments in renewables. This short review provides an overview of nuclear power in Europe and speculates on options. This ‘nuke optionality’, hinging on a favourable green taxonomy, is a game-changer for EDF, Centrica, Fortum but also Engie, Iberdrola, Enel and EDP.

H1 21: saved by trading and non-core business

Mixed half-year figures for the German utility: despite beating analysts’ estimates, RWE’s adjusted EBITDA was down to €1.75bn, declining 4.5% year on year. The drop in EBITDA was mainly due to adverse wind conditions in Europe and to an unprecedented cold snap in Texas during February 2021. However, the company was able to upgrade its FY21 outlook, on the back of an outstanding performance of the Supply & Trading division in H1 21, in which EBITDA jumped +63%.

Hurt by one-offs, as expected

A difficult but expected quarter for the German utility. Adjusted EBITDA was driven down by 33% mainly due to the sharp impact from the Texas cold snap (€-400m) and adverse wind conditions in Europe. The earnings forecast and dividend policy are, however, confirmed and seem realistic for the full year, despite non-recurring items. The promising outlook for the following years remain constrained by the high exposure to thermal assets. But we’re betting on an accelerated green transition.

Sound FY20 figures, disappointing FY21 guidance

RWE published solid full-year results for 2020 that even exceeded the latest guidance given by the group. However, apart from the increase in the dividend, the FY21 guidance is disappointing as EBITDA and net income fall well below the consensus, mainly driven by extra costs due to the cold snap in Texas. In all, we reiterate our negative view on stock.

Q3 20: the upper end of guidance is now targeted

Good operating results over the first nine months of the year, but mainly backed by the first quarter. The group has confirmed its FY20 guidance and is now targeting the upper end of it. Looking ahead, with 85% of the ytd investments devoted to green activities, the group is well on track to achieve its objectives. In addition, the balance sheet is strong enough to accelerate investments – the group is said to be open to further external growth.

A 10% capital increase

RWE has successfully concluded its capital raising of c.10% of its market cap at a price of €32.55/share, or a 4.9% discount versus the last closing price (18/08/2020). The proceeds will be used to give some flexibility in expanding its renewables activities – as a reminder, the group is targeting a 1GW portfolio (wind + solar) by 2022, implying a capex need of at least €5bn. Operating guidance and dividend policy are unchanged and confirmed.

Renold - Strong end to FY24: EPS up 11%. Robust FY25: EPS up 27.6%

The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme

Morning Note – 16 April 2024

Billington Holdings - Record result boosts dividend; forecasts upgraded

FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively

Q1 Operating Results

Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k

Plant Health Care - China distribution with AMVAC

Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car

Morning Note – 15 April 2024

Severfield - Multiple positives should excite investors

Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear

discoverIE - Back to organic growth

discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli

Warns on brine supply costs

SP Angel . Morning View . Copper prices hold higher as China processing fees fall below $0/t amid low feedstock availability

PROGRESSIVE: Severfield: Targeted acquisition strategy aids growth path

Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.

LIBERUM: Severfield: Erratum: Better EPS and cashflow, and buyback

Invinity Energy Systems - Update on Strategic Investment

Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.

PROGRESSIVE: Severfield: Step change in European and Indian outlook

Severfield’s full-year results to March will be ‘slightly above’ the Board’s expectations, according to today’s trading update, with net debt significantly better. We maintain our PBT estimates for both forecast years, which are ahead of consensus, but reduce our net debt for FY24E. Record orders were boosted by the steel specialist’s European operations, after last year’s Voortman acquisition, while the Indian JV has seen ‘another step up in profitability’. The group has also launched its first

Clean and competitive fertiliser