German electric utility RWE AG posted first-quarter adjusted EBITDA of €1.89 billion, an 11.3% drop from €2.13 billion a year earlier, due to lower generation margins and weak energy trading performance.
Adjusted net income for the quarter was €517 million, down 25% from €689 million in the first quarter of 2017. External revenue totaled €11.62 billion, compared to €12.53 billion a year ago, results released May 15 showed.
Cash flows from operating activities improved year over year to €364 million, from negative €1.13 billion in the prior-year period. Capital expenditure was up to €558 million, from €391 million a year ago.
The utility reported GAAP net income for the quarter of €620 million, a drop of 34.5% from €946 million a year earlier.
In 2018, RWE recorded an average price of €28/MWh for generation from lignite and nuclear power, down from €31/MWh in 2017. The company's net debt rose to €20.9 billion for the first quarter.
Looking ahead, the utility continues to target fiscal 2018 adjusted EBITDA of €1.4 billion to €1.7 billion and adjusted net income of €500 million to €800 million. The company's executive board is targeting a dividend of 70 cents for fiscal 2018.
"The main events for RWE are the execution of the transaction with [E.ON SE] and political discussions about the future outlook for energy policy in Germany. At the same time, we are on track with our operating business: the year started well and we can confirm our outlook for the full year and the targeted dividend for 2018," RWE CFO Markus Krebber said.
RWE and E.ON first announced the multibillion-euro asset swap March 11 in which E.ON would acquire RWE's 76.8% stake in Innogy SE for 16.7% of E.ON's equity.
