Germany's largest power producer RWE has written off its long-term supply contract for Russian coal, resulting in a financial loss of around €850 million ($894 million), as the EU and the UK imposed sanctions on Russian coal imports due to the Ukrainian crisis.
The sanctions led to RWE writing off deliveries of 12 million tonnes of hard coal through to 2025 from Russia, the company said in its quarterly report.
"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."
RWE started the year with a shiny performance in the first quarter. Its Q1 adjusted EBITDA stood at €1,460 million, much higher than the previous year's €883 million, and adjusted net income more than doubled from €340 million to €735 million.
RWE's wind and solar generation in the reporting period increased over 20% from the year prior, mainly due to more favorable wind conditions. The share of renewables in overall generation capacity increased to 30%, after the commissioning of an offshore wind farm in the UK, the 200-MW wind farm in Texas and onshore projects in France and Germany in the reporting period.
The company expected fiscal 2022 to achieve adjusted EBITDA of €3.6-4 billion at the Group level and €2.9-3.3 billion from the core business, the report said.
(Writing by Alex Guo Editing by Tammy Yang)
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