* About 6 pct of European capacity to be idled or shut
* Many power stations in the red, says CFO
* H1 EBITDA at 5.5 bln eur vs 5.54 bln Rtrs poll
* H1 recurrent net income 1.99 bln eur vs 2.09 bln Rtrs poll
* Shares fall 5.2 percent
(Adds CFO comment, details on Gazprom, shares)
By Christoph Steitz
FRANKFURT, Aug 14 Germany's No.2 utility RWE
followed peers by announcing cuts in generating
capacity, blaming an expansion of renewable energy that has
pushed many gas and coal-fired plants into losses.
Germany's utilities are suffering from plunging wholesale
power prices, which are down by about a fifth in the year to
date, and subsidised renewable energy that takes priority
feeding into the grid, thereby reducing the hours that many
conventional plants can run.
"Many of our power stations are now in the red," Chief
Financial Officer Bernhard Guenther told journalists during a
conference call on Wednesday. "This is the greatest crisis our
industry has faced for many decades."
RWE said it would take offline 3,100 megawatts (MW) of power
plant capacity in Germany and the Netherlands, about 6 percent
of its European total of 52,000 MW, and added that it is
assessing similar steps for more plants while cancelling
sizeable supply deals involving power purchases from other
A source told Reuters on Monday that the group was planning
to idle or shut down thousands of megawatts of capacity.
On Tuesday larger peer E.ON said it had already
shut down or idled about 6,500 MW of capacity and may close or
mothball more than the 11,000 MW it had previously put under
NO GREAT EXPECTATIONS
Operating profit at RWE's conventional power generation
business, accounting for 17 percent of the group's total, was
down by 62 percent year on year at 690 million euros ($913
million) in the first half, triggering further savings efforts
at its power plant division.
Having recently fallen to a 10-year low, shares in RWE and
E.ON have proven to be a challenging investment, with little
growth prospects in the foreseeable future.
At 0930 GMT, shares in RWE were 5.2 percent lower at the
bottom of Frankfurt's benchmark DAX index, as analysts
pointed to slightly lower than expected first-half results and a
strong rise in the group's shares a day earlier on the back of
good results by peer E.ON.
"You shouldn't have great expectations when it comes to
growth. The amount of electricity in Germany shrinks, there is
less demand for the product," said Thomas Deser, senior fund
manger at Union Investment, which holds 0.55 percent in RWE,
according to Thomson Reuters data.
"The company should try to lower costs as much as possible
and become a reliable dividend machine," he added.
RWE said recurrent net income rose by 19 percent to 1.99
billion euros in the first half of the year, below the 2.09
billion average forecast in a Reuters poll.
The strong year-on-year rise was mainly because of an
arbitration ruling under which Russia's Gazprom had to
reimburse RWE for overpayments on gas purchases.
This, RWE said, had boosted first-half operating earnings by
1 billion euros.
($1 = 0.7555 euros)
(Additional reporting by Vera Eckert; Editing by Peter Dinkloh
and David Goodman)