German utility RWE AG said Monday an arbitration court settlement in a dispute with Russian producer Gazprom
OAO over the pricing of natural gas supplies via long-term
contracts that are linked to the price of crude oil has no effect on the
company's guidance for 2013.
MAIN FACTS:
-The analysis of the ruling revealed that the financial
effects of the award are in line with the company's expectations.
Therefore, they do not have an impact on RWE with respect to its outlook
for fiscal 2013.
-RWE has guided for an 8% decline in operating profit in 2013, despite the end of the Gazprom dispute, as muted power demand and low electricity prices are eating into the profitability of its power generation business.
-On June 27, 2013, an arbitral tribunal had granted RWE's
request for a revision of the purchase price payable by RWE for the
natural gas supplied under its long-term gas supply contract with Gazprom.
-In its final award, the tribunal awarded RWE a reimbursement
for payments made since May 2010 and adjusted the purchase price formula
of the contract by introducing a gas market indexation, which according
to the arbitral tribunal reflects the relevant conditions on the gas
market at the time of the price revision in May 2010.