Innogy income from discontinued operations, which includes renewables, increased to €303m in the first quarter of 2020, up from €192m last year, driven by a strong showing from on- and offshore wind assets.
The German energy company said wind farms benefited from favourable weather conditions, which had a positive impact on power production.
New onshore capacity in the UK – Clocaenog, Bad a Cheo and Mynydd y Gwair – also boosted the figures, Innogy said.
Renewables are included in discontinued operations as they are part of a complex deal between RWE, which owns Innogy, and Eon that will see the clean power assets transferred to RWE soon.
Overall, Innogy reported adjusted earnings before interest and tax (EBIT) for the first quarter of 2020 dropped 23% to €512m, compared with €662m in the first quarter of 2019.
The German energy company said its grid and infrastructure division accounted for €455m of earnings in the first quarter, down from €589m for the same period last year.
Adjusted net income fell to €154m in the period, from €226m – an almost 32% drop. This was due to weaker EBIT, Innogy said.
The company said its overall operations had “performed as expected”, given the adverse impact of warm weather conditions and Covid-19 on energy demand.
In its outlook comments for 2020, Innogy warned that the effects of the Covid-19 pandemic could harbour “major risks” for the company.
“In the year underway, the EU economy is likely to slip into a recession due to the COVID-19 pandemic and the countermeasures taken. At present, it is impossible to predict the severity of the recession, as there has been no reliable economic data so far,” it said.
Innogy said lower grid throughput volumes could lead to potential earnings shortfalls, as well as sales shortfalls in the retail business – in particular with industrial customers.
“There is a risk that customers may suffer hardship as a consequence of the Covid-19 pandemic, rendering them unable to settle their accounts payable – particularly for electricity and gas purchases,” the company warned.
In its retail division, Innogy said it is currently witnessing the adverse effects of the necessary resale of electricity and gas volumes at lower market prices as the company can no longer sell them due to the decline in demand in certain cases.
“In addition to the warm weather in the first quarter of 2020, which led to a decrease in gas sales in our high-margin customer segments, Innogy now expects the retail division to achieve an adjusted EBIT of €200 to 300m – previously €250 to 350m,” the statement said.
“The outlook for the group currently remains unchanged. However, due to the substantial uncertainty caused by the persistent COVID-19 pandemic, only limited statements can be made regarding its development and impacts in fiscal 2020,” it said.