Lower  wholesale  electricity  prices  and squeezed generation margins have seen RWE's 

earnings fall another 25% in the first quarter of 2018, Germany's biggest power producer 

said Tuesday. 

Nuclear, lignite prices reach 'trough' at Eur28/MWh 

Spread-based power hedging below 10% for 2020/21 

CO2 positions financially hedged to 2021 at Eur5-6/mt 

Adjusted  net i ncome fell to Eur517 million ($616 million), but the company still expects to 

achieve its operational goals for the year especially as power prices have started to rebou

nd sharply, it said. 

RWE achieved an average price of Eur28/MWh for its lignite and nuclear power generation, 

down from Eur31/MWh in 2017, it said. 

"From today's perspective, this means that we have reached the trough," it added. 

Q1  power  output  was down  13.7% on year at 49.9 TWh amid the closure of its 1.3 GW 

Gundremmingen B reactor and two old lignite units, it said. 

Looking forward, RWE flagged a "lower average hedge price for 2020 due to strong decline

 of spreads since the beginning of 2018" despite the company being financially hedged for it 

CO2 position until end of 2022 with the average hedged CO2 price in the range of Eur5-6/mt, 

it said. 

"We believe that spreads are fundamentally undervalued especially for years further out and 

expect  a  rebound," RWE CFO Markus Krebber said during an earnings call. "For 2020 we 

keep [outright power] positions open."