RWE Plans €1.5 Billion Buyback as US Politics Cloud Investments

(Bloomberg) - German energy company RWE AG has decided to buy back as much as €1.5 billion ($1.6 billion) of shares as political risks in the US have complicated its investment plans.

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The repurchases will start this year and be completed within 18 months, RWE said late Tuesday in a statement.

"Given the results of the US elections, the risks for offshore wind projects have increased," RWE said, adding that the ramp-up of hydrogen in Europe is also not progressing as quickly as expected. "Against this background, the company has announced that it will buy back shares."

RWE has faced growing shareholder frustration in recent months over its falling share price and its focus on US expansion rather than share buybacks. In September, Chief Executive Officer Markus Krebber said the company was prioritizing building clean generation to meet artificial intelligence-led demand growth in the US and Europe.

But last week, RWE's shares tumbled along with other clean energy stocks after Donald Trump won the US presidential election. It's one of the biggest renewable energy companies in the US since completing its acquisition of Con Edison in 2023. Trump has been critical of offshore wind and has promised to raise tariffs on imports.

The election result "also affects RWE's offshore wind project off the east coast of the US, which could be delayed due to outstanding permits," the company said.

In RWE's home country of Germany, political risks have also clouded the outlook for investments after the governing coalition imploded last week and lawmakers agreed to hold early elections in February. The country's hydrogen push has been materializing slower than officials had hoped for, and peers such as Uniper SE are delaying investments in the space.

Still, RWE reiterated that will spend €55 billion on green investments globally by 2030.

It also said 2024 earnings expectations have slightly improved, with adjusted earnings before interest, taxes, depreciation and amortization likely to reach the middle of its forecast range of €5.2 billion to 5.8 billion. It previously expected them to be at the lower end of that guidance.

-With assistance from Simon Casey, Brian Eckhouse and Elizabeth Elkin.

(Updates with additional details from first paragraph.)

RWE Plans €1.5 Billion Buyback as US Politics Cloud Investments

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