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Boosted by gas plants, RWE blows past guidance with preliminary results

Illustration shows Electric power transmission pylon miniatures and RWE logo

By Christoph Steitz

FRANKFURT (Reuters) -RWE, Germany's biggest electricity provider, on Wednesday released preliminary full-year profit for 2022 that exceeded its forecast, citing weak wind conditions that favoured the use of its gas-fired power plants.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) likely soared 73% to 6.3 billion euros ($6.9 billion) in 2022, higher than the upper end of its estimated range of 5.5 billion euros, the company said.

Adjusted net income more than doubled to 3.2 billion euros, RWE said.

Its shares rose as much as 3.3% on the news.

Citing "higher earnings from short-term power plant deployment and higher international generation margins", core profit at the group's unit in charge of biomass, hydro power and gas plants more than tripled to 2.4 billion euros.

Results also benefited from RWE's commodity trading division, the company said.

RWE, which produces electricity from conventional sources such as gas and coal but also from solar and wind, has around 13.9 gigawatts of gas-fired power plants across Europe, accounting for more than a third of its installed capacity.

"A key driver for our earnings growth year-on-year was the increase of our generation capacity based on renewables," Chief Financial Officer Michael Mueller said in a statement.

RWE, which in October agreed to buy the green energy arm of U.S.-based Con Edison, said the group raised its net cash investment by more than half to 4.4 billion euros in 2022, according to Mueller.

"Overall, we see the update as positive, highlighting the strength of RWE's diversified portfolio and energy trading operations," analysts at Jefferies said.

The group, which is scheduled to release full-year results on March 21, will keep unchanged its dividend proposal for 2022 of 0.90 euros per share, it said.

($1 = 0.9172 euros)

(Reporting by Christoph Steitz, Editing by Miranda Murray and Bernadette Baum)