RWE AG — Management Reports 2002

Dec 16, 2002

News Details

Ad-hoc | 16 December 2002 09:46

RWE AG english

December 16, 2002, Outlook on RWEs 2003 Fiscal Year Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– RWEs state of affairs was portrayed negatively and, on the whole, inappropriately in media reports following the irresponsible leakage of confidential planning figures. This has caused the Executive Board to see to it that material key statements on business developments anticipated for 2003 are made immediately, instead of waiting for the annual financial statements 2002 to be presented, which is scheduled for March 17, 2003, and would be the usual date for such disclosure. The operating result and EBITDA will post strong double-digit growth in 2003. By contrast, net profit will be substantially down year-on-year. The financial market is already aware of the reasons for this: – Cyclically-induced declines in results generated by the Environmental Services Business Area and Heidelberger Druckmaschinen – Considerably lower result from divestments compared with 2002. – All financing costs for all acquisitions, incl. American Water Works. – All scheduled goodwill amortization (Euro 1.1 billion), incl. American Water Works. The change in the treatment of goodwill in accordance with IAS that is expected to become applicable over the course of 2003 in the form of impairment tests will have a positive effect on RWEs net profit. Investigations conducted in cooperation with the balance sheet auditor PwC to prepare for the transition to IAS have gone on for quite some time now and revealed that there are currently no indications supporting an impairment requirement for any of the three major acquisitions, i.e. of Thames Water, Transgas or Innogy. Taking the acquisition of American Water Works into consideration, the RWE Groups net debt will rise to some Euro 26 billion. However, this figure will drop by about Euro 2 billion by the end of 2003. Measures to reduce debt will be further implemented in 2004 and 2005. The planned divestments of shares held in Heidelberger Druckmaschinen and HOCHTIEF have not yet been included in this figure. The key rating indicator (EBITDA divided by net interest) for utilities such as RWE will be above 5 throughout 2003 and thus fall within the upper segment of the target range of 4.5 to 5.5 that has already been communicated to the financial market. end of ad-hoc-announcement (c)DGAP 16.12.2002 ——————————————————————————– WKN: 703 712; ISIN: DE0007037129; Index: DAX, EURO STOXX 50 Listed: Amtlicher Markt in Düsseldorf, Frankfurt; Freiverkehr in Berlin, Bremen, Hamburg, Hannover, München, Stuttgart; EUREX; Swiss Exchange 160946 Dez 02