(Bloomberg) -- Germany’s largest power producer RWE AG saw earnings fall by nearly a third in the first half after a decline in power prices weighed on results.
The energy company said adjusted earnings before interest, taxes, depreciation and amortization amounted to €2.9 billion ($3.2 billion) in the six months through June, down from €4.1 billion a year earlier.
While the utility profited from relatively high electricity prices in Europe during the past two years, these have fallen considerably since last November due to lower gas costs, an increase in renewable generation and a recovery in France’s nuclear fleet.
Analysts are closely watching for news related to a report that RWE is exploring purchasing a stake in US power-plant giant Calpine Corp., with US energy demand expected to surge thanks to artificial intelligence, data centers and factories.
Chief Executive officer Markus Krebber declined to comment further on potential M&A deals in a call with reporters on Wednesday. But he said that the US power market is “attractive” because of its strong demand growth.
The company said its earnings from renewables reached a record during the period, driven by better weather conditions and commissioning of new capacity. Wind and solar accounted for 45% of the company’s power production, and carbon dioxide emissions fell by 27%.
Analysts at Bernstein said RWE’s stated progress on cutting emissions may offer a “subtle hint” that they won’t want to backtrack on that strategy by buying Calpine’s gas assets. RWE didn’t directly comment on the issue.
The firm still expects full-year earnings at the lower end of a range between €5.2 billion and €5.8 billion.
RWE added it sees “high” political risks related to US presidential elections in November, which “may lead to a change in US energy policy, which could impede investments in wind and solar energy.”
While similar developments are conceivable in Europe, RWE said a recent European Union electricity market reform and the UK election have boosted the likelihood of green investments becoming more attractive.
Shares dropped 1% in Frankurt, taking this year’s plunge to 22%.
(Updates with CEO comment on US market in fifth paragraph.)
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