RWE 9 month net profit falls to 2.2 billion euros

FRANKFURT — German utility RWE AG said its net profit for the first nine months of the year decreased 22 percent as high costs offset rising sales. The company confirmed its outlook for the full year despite the global economic crisis.

Essen-based RWE said net profit in the January-September period fell to 2.2 billion euros ($2.8 billion) from 2.8 billion euros a year ago.

Electricity sales in the first nine months were up 3.4 percent to 236 billion kilowatt hours, while gas sales rose 1.5 percent to 226 billion kilowatt hours.

The company did not release three month figures.

RWE said it is in a "solid financial position," and is only affected to a limited extent by the current financial crisis.

"The RWE group expects to increase external revenue in fiscal 2008 by more than 10 percent above last year's level," RWE said.

"The company still anticipates that the operating result will at least match the level achieved in 2007. RWE also confirms its forecast of a rise in recurrent net income by more than 10 percent."

Operating profit increased 5 percent to 5.8 billion euros ($7.4 billion) but was weighed down by fewer emission allowances for power generation as well as lower fees for other power companies tapping into its grid. The government had forced RWE to decrease these.

Capital expenditure was up 37 percent on the year to 3.4 billion euros ($4.3 billion) in the January through September period. The company said its expenditures on property, plants, and equipment rose 5 percent.

RWE said its cost reduction program is progressing according to plan and expects to see a 100 million euro ($127 million) contribution to earnings from the program in the current year.

Shares of RWE closed down 1.9 percent at 67.20 euros ($84.45) in Frankfurt.

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