RWE AG, Germany second-largest utility, cut losses in its trading and gas unit by more than half and said the outlook is improving.
The power producer’s trading and gas midstream arm lost 403 million euros ($514 million) on an earnings before interest and tax basis in the first nine months of the year, the Essen, Germany-based RWE said today in its earnings report. That compares with a loss of 842 million euros in the same period last year.
“A marked improvement of the performance of our energy trading activities was contrasted by ongoing heavy burdens in the gas midstream business,” RWE said. “Parts of our gas purchases are based on long-term, oil price-indexed contracts, and we have to pay prices for this gas that are much higher than those realizable when it is sold on the market.”
RWE forecasts the unit to produce a full-year result significantly above last year’s operating loss of 800 million euros, it said. The company in August forecast the unit to produce a full-year result “in the order of last year’s,” it said on Aug. 14.