Npower turnaround ahead of plan as RWE wins back customers

* RWE (LSE: 0FUZ.L - news) won more than 200,000 clients in UK in July

* See profit at npower next year

* Shares (Berlin: DI6.BE - news) reverse losses, up 2.4 pct (Recasts, adds details on npower, shares)

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF, Aug 11 (Reuters) - RWE, Germany's second biggest utility, has won back customers in Britain, showing how efforts to turn around its npower business there have born fruit sooner than expected.

Problems at npower emerged last year, when RWE warned of a rapid loss of customers as well as billing issues that effectively prevented it from charging clients. It subsequently replaced top Npower management and embarked on a restructuring.

"We're a bit ahead of plan," RWE Chief Executive Peter Terium said on Thursday after RWE reported first-half results. He said RWE had clawed back more than 200,000 British customers in July, which keeps the numbers stable at 5.2 million compared with the end of last year.

"The number of customer complaints also fell greatly during the first six months of the year," Terium said. He also said the impact from Britain's decision to leave the European Union on RWE would be manageable.

He expects npower return to profit next year.

Npower is one of the big six energy providers in Britain, RWE's second largest market by customers after Germany. In 2015, it made an operating loss of 137 million euros, compared with RWE's group operating profit of 3.84 billion. It accounted for about a fifth of RWE's external sales.

Shares in RWE reversed earlier losses and traded 2.4 percent higher by 1036 GMT, the biggest gainers in the STOXX Europe 600 Utilities index.

The group's shares have risen sharply so far this year, making them among the strongest performers among German blue-chips, second only to sporting goods maker Adidas , as investors await the listing of RWE's Innogy business.

This will separate its renewable power generation, distribution and retail businesses from its troubled thermal and nuclear power generation operations, which have been hit by Germany's drive towards renewable power at the expense of coal and gas-fired plants and the closure of nuclear stations.

RWE said the sale of up to 10 percent of Innogy remained on track and was scheduled to take place before the end of the year.

Earlier on Thursday, RWE posted a 7-percent drop in first-half operating profit, below analyst expectations, blaming losses at its volatile trading business which will remain part of RWE after the Innogy listing in the autumn.

The group stuck to its outlook, still expecting operating profit to fall to between 2.8 billion and 3.1 billion euros and adjusted net income to decline to between 0.5 billion to 0.7 billion euros.

($1 = 0.8959 euros) (Additional reporting by Vera Eckert; Editing by Maria Sheahan and Jane Merriman)