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RWE responds to investor calls for buybacks

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Cites weaker U.S. offshore wind, hydrogen prospects

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RWE now targets midpoint of range for adjusted annual

EBITDA

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RWE's nine-month adjusted EBITDA fell 30% but beat poll

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(Changes dateline, updates with Wednesday's pre-market stock

gains in lead paragraph, includes analysts in paragraphs 7, 12)

By Christoph Steitz, Kanjyik Ghosh and Vera Eckert

FRANKFURT, Nov 12 (Reuters) - Shares in RWE

rose 3.3% in pre-market Wednesday trade after Germany's biggest

utility announced overnight it would buy back up to 1.5 billion

euros ($1.6 billion) of shares, citing weakening prospects for

hydrogen in Europe and U.S. offshore wind following Donald

Trump's re-election.

By launching the buyback, which will start during the fourth

quarter and run over 18 months, RWE is also succumbing to

growing investor pressure to review its capital allocation in

the face of challenged returns for clean energy projects.

"We apply strict return requirements to the investment of

our funds and regularly review our capital allocation. If the

risk-return profile in certain areas changes temporarily, we

reallocate the capital earmarked for this purpose accordingly,"

RWE Chief Executive Markus Krebber said in a statement.

RWE issued better than expected nine-month financial

results, a slight guidance hike for the full year, and

confirmation of a 1.1 euros per share 2024 dividend target.

RWE said the risks for offshore wind had increased in light

of the election of Trump, an outspoken critic of the technology,

as the next U.S. president. The company added its project off

the U.S. east coast could be delayed due to outstanding permits.

RWE also warned that a planned hydrogen ramp-up in Europe

was not going as planned, adding this could delay its efforts to

build electrolyser capacity, chiming with similar comments by

smaller rival Uniper last week.

Analysts were positive on the news.

"We see the buyback and RWE's willingness to change tact in

light of changing market dynamics as a significant

positive/clearing event for the stock," said Jefferies in a

note. RWE shares had previously lost 27% in the year to date.

RWE's move reflects broader fears of what Trump's return to

the presidency could mean for clean energy investments in the

U.S., with parts of current President Joe Biden's clean

technology agenda expected to be scrapped.

At the same time, RWE gave a slightly more optimistic view

for 2024, saying it now expected to hit the midpoint of target

ranges for adjusted core profit (EBITDA) and adjusted net

profit, citing improved prospects for its trading unit and

gas-fired power plants.

The group previously expected to hit the lower end of an

adjusted EBITDA range of 5.2 billion to 5.8 billion euros and an

adjusted net profit of 1.9 billion to 2.4 billion euros in 2024.

RWE's nine-month adjusted EBITDA fell 30% to 3.98 billion

euros, above 3.87 billion euros expected in a poll provided by

the company on Oct. 29.

"Today's announcements and especially the buyback could

prove to be a turning point for rebuilding confidence in

management," said a Bernstein research note, ahead of a press

conference and an analyst call with RWE's CEO and CFO.

($1 = 0.9424 euros)