RWE takes $894 million writedown on Russian coal ban, Q1 core profit up

© Reuters. FILE PHOTO: Steam rises from the cooling towers of the coal power plant of RWE, one of Europe’s biggest electricity and gas companies in Niederaussem, Germany, March 3, 2016. REUTERS/Wolfgang Rattay

FRANKFURT (Reuters) -RWE, Germany’s largest power producer, on Thursday took an 850 million euros ($894 million) writedown on a long-term supply contract for Russian coal, ahead of an EU-wide ban on the fuel that comes in response to Moscow’s invasion of Ukraine.

RWE has contracts covering deliveries of 12 million tonnes of Russian hard coal through to 2025, it said in its quarterly report, adding these deliveries have already come to an end.

“From August, a ban by the EU on importing coal from Russia will come into force. The UK government had already imposed sanctions against Russian Railways from March,” RWE said.

“As a company that is active in the UK, this means that RWE has not accepted any coal from Russia since the end of March. As a consequence, RWE has written off its long-term supply contract for Russian coal.”

The group’s first-quarter core earnings rose by about two thirds, partly driven by stronger winds but also because results a year ago were burdened by a 400 million euro hit in the wake of extreme weather in the United States.

($1 = 0.9508 euros)


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