* Proposes cutting dividend to 1 euro/share from 2
* Trims future dividend payouts to 40-50 pct of net
* Utility hit hard by German move to green energy (Adds context, RSE standing by forecast made in March)
FRANKFURT, Sept 19 (Reuters) - Germany’s No. 2 utility RWE AG will slash the amount of net profit it plans to pay out as a dividend in light of dimming earnings prospects in electricity generation as the country shifts toward renewable energy.
RWE said in a statement on Thursday it planned to pay 1 euro per common or preferred share for 2013, down from 2 euros previously, in a proposal it would put to its meeting of shareholders on April 16 next year.
The payout ratio in subsequent years would fall to 40-50 percent of net profit, from the previous target range of 50-60 percent, RWE said, adding that it would stick to its 2013 earnings forecast.
Europe’s largest economy has seen its energy sector slide into crisis following its decision to abandon nuclear power by 2022, as a massive expansion of solar energy has dealt a heavy blow to traditional utilities, forcing them to close plants generating thousands of megawatts.
Shareholders had told Reuters they feared a dividend cut was on the cards and said they would pressure the company to present a convincing strategy after RWE took too long to face up to Germany’s shift to green energy.
In its statement on Thursday, RWE said was standing by its forecast for 2013 unveiled in March, in which it predicted earnings before interest, tax depreciation and amortisation (EBITDA) of about 9 billion euros ($12.19 billion), operating profit of 5.9 billion and net income of 2.4 billion.
$1 = 0.7384 euros Reporting by Jonathan Gould; Editing by Victoria Bryan and Anthony Barker