RWE AG (RWEA) Q2 2026 Earnings Report

The call was broadly positive: RWE delivered markedly stronger H1 financials, upgraded FY26/FY27 guidance, strengthened its strategic position by increasing the Amprion stake and announced a large, disciplined EUR 42 billion investment program with explicit return targets. Operational execution (EBITDA growth, secured capacity awards, PPAs, and construction progress) supports visible earnings growth. Notable cautions include negative H1 operating cash flow driven by seasonal working capital, heavy near‑term cash investments (including Amprion funding), some earnings uplift from one‑offs (EUR 332m compensation), and regulatory/market uncertainties (TSO regulation, German offshore/renewables design) that could affect returns beyond the planning horizon. On balance, the positives—guidance upgrades, portfolio diversification into regulated grid, secured secured earnings, and clear capital allocation discipline—outweigh the near‑term cash and one‑off related drawbacks.

RWE upgraded its near‑ and mid‑term guidance and set a clear multi‑year plan: 2026 adjusted EPS was raised from €2.55 to €2.95 (midpoint €2.95) with 2027 EPS guided at €3.15 (reflecting the 55% Amprion stake), 2026 adjusted EBITDA now €5.75–€6.35bn and adjusted net income €1.95–€2.45bn, dividend target €1.32 for FY‑26 (and dividends to grow +10% p.a.), and management targets adjusted EPS to grow at a 10% CAGR from 2025–2031 with 75% of 2031 adjusted EPS secured; the group plans €42bn net investment from 2026–2031 (IRR >8.5% on new generation/storage, target ROE >8% on grid), will keep leverage at the lower end of a 3.0–3.5x range, and reiterated operational baselines from H1: adjusted EBITDA €3.0bn, adjusted income €1.3bn, adjusted EPS €1.77, H1 cash investments €6.3bn (incl. €1.7bn for Amprion with a further €1.9bn to post in Q3), net debt €15bn (end‑June and expected year‑end), trading midpoint already reached within a €100–€500m range, Amprion closed at EV/RAB 1.07x (55% stake), FID IRR since 2025 averaged 9.9%, >750MW commissioned in H1, 10.3GW under construction, >15GW capacity awards secured, ~1.1GW new PPAs (incl. a 500MW recontracting), USD900m LNG investment to contribute earnings from 2031, a USD300m turbine reservation, target >3GW gas new build by 2035 and grid connections secured for up to 10GW.