RWE Aktiengesellschaft ETR: RWE raised its earnings outlook for 2026 and 2027 after reporting stronger first-half operating and financial performance, supported by renewable generation, flexible power assets, a compensation payment in the Netherlands and an improving trading business.
Chief Executive Officer Markus Krebber said the company had made “continued progress” in strengthening its portfolio and was positioned to benefit from electrification, energy-security priorities and the expansion of grid infrastructure in Europe and the United States.
Adjusted earnings per share rose more than 60% year over year to €1.77 in the first half, while adjusted income totaled €1.3 billion. RWE said it now expects 2026 adjusted EPS at a midpoint of €2.95, compared with its previous target of €2.55. The company also set 2027 adjusted EPS guidance of €3.15, reflecting its increased stake in German transmission system operator Amprion and higher power-generation margins.
First-Half Earnings Rise Across Core Businesses
Chief Financial Officer Michael Müller said adjusted EBITDA reached €3 billion in the first half, an increase of more than €900 million from the prior-year period.
- Offshore wind adjusted EBITDA increased €167 million to €810 million, primarily due to normalized wind conditions.
- Onshore wind and solar adjusted EBITDA rose €186 million to €1.02 billion, aided by the commissioning of new assets.
- Flexible generation adjusted EBITDA reached €1.03 billion, including a €332 million compensation payment related to production restrictions at the Eemshaven power plant in the Netherlands in 2022. Higher contracted capacity payments in the U.K. also contributed.
- Supply and trading adjusted EBITDA totaled €134 million after a stronger second quarter following a weak start to the year.
Krebber said trading performance remained strong in July and August. As of the call, the business had reached the midpoint of its €100 million to €500 million guidance range, with any additional performance representing potential upside to the group’s earnings targets.
RWE reported adjusted operating cash flow of negative €759 million at the end of the first half, primarily reflecting seasonal working-capital effects. Changes in operating working capital amounted to negative €2.7 billion, driven by purchases of carbon dioxide certificates, higher accounts receivable and lower accounts payable.
Net debt stood at €15 million at the end of June, according to Müller. Cash investments totaled €6.3 billion, including €1.7 billion associated with the portion of the Amprion acquisition completed in June. A further €1.9 billion related to the transaction was expected to be reflected in third-quarter figures. RWE expects net debt of €15 billion at year-end.
Amprion Becomes a Third Strategic Pillar
In June, RWE increased its stake in Amprion to 55%, adding regulated grid infrastructure as a third pillar of its strategy alongside power generation and trading activities. Krebber said the transaction closed at an enterprise-value-to-regulatory-asset-base multiple of 1.07.
The company is in discussions about potentially increasing its stake further, though Krebber said that would not require an additional equity raise. Amprion will become a separate regulated-grid-business segment beginning next year.
RWE plans to invest €42 billion net across its core businesses between 2026 and 2031, including renewable generation, flexible generation, storage and regulated grids. The company targets an average internal rate of return above 8.5% for new generation and storage investments and a return on equity above 8% for grid investments.
Krebber said the investment program is intended to support adjusted EPS growth at a compound annual rate of 10% from 2025 through 2031. RWE expects 75% of its 2031 adjusted EPS to be secured, with the proportion expected to rise over time as investments are increasingly backed by contracts, capacity-market arrangements, contracts for difference or power-purchase agreements.
U.S. Strategy Shifts Toward Infrastructure and Flexible Generation
RWE said a settlement agreement with the U.S. administration concerning offshore wind leases enabled it to release capital from projects without a realistic development path and redirect it toward other U.S. energy infrastructure.
The company has made a $900 million financial investment in an energy terminal backed by a long-term tolling agreement. RWE expects the project to contribute earnings beginning in 2031, though it is not included in the company’s current 2031 guidance.
RWE also reiterated its goal of building more than 3 gigawatts of gas-fired generation capacity in the U.S. by 2035. It has secured grid connections capable of supporting up to 10 gigawatts of gas projects across its development pipeline and entered into a $300 million turbine-reservation agreement with GE Vernova. Initial turbine units could be delivered for projects scheduled to enter service in 2029, with first final investment decisions expected by the end of 2026.
The company continued to streamline its portfolio, selling Swedish wind activities, a Polish Baltic Sea offshore wind project under development and its U.S. distributed-generation business.
Capacity Markets, PPAs and Development Pipeline
RWE secured income for more than 15 gigawatts of capacity during the first half through awards in the U.K.’s AR7 auction, the British T-4 capacity auction and Germany’s capacity-reserve tender. It also signed nearly 1.1 gigawatts of new power-purchase agreements, including a 500-megawatt recontracting agreement for an existing U.S. asset.
More than 750 megawatts of new capacity entered operation in the first half, while projects under construction totaled 10.3 gigawatts at the end of June. RWE said final investment decisions made since the beginning of 2025 carried an average internal rate of return of 9.9%.
Management identified additional potential upside from future capacity markets in Germany and the Netherlands, data-center development opportunities and higher power prices. Müller estimated that applying pricing similar to the most recent U.K. capacity auction to RWE’s eligible German and Dutch capacity could imply an earnings opportunity in the range of €300 million to €400 million, though this is not included in 2031 guidance.
For 2026, RWE now expects adjusted EBITDA of €5.57 billion to €6.35 billion and adjusted net income of €1.95 billion to €2.45 billion. Its dividend target remains €1.32 per share, consistent with its stated objective of 10% annual dividend growth.
About RWE Aktiengesellschaft (ETR:RWE)
RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities.
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