The German-based utility, which owns power stations and retailer Npower in the UK, plans to offer â¬1 a share in 2013, half that of the previous year.
In future years, it proposes a payout ratio of 40 to 50 per cent of recurrent net income, down from 50 to 60 per cent. The retained funds will go to service debt.
Conventional power plants in Germany have suffered from weak electricity demand and a rapid expansion of renewable capacity lowering power prices.
Chief executive Peter Terium said earnings from conventional electricity generation are expected to drop further.
“We are undoubtedly facing difficult times, and our dividend policy must take this into account,” he said.
Management will give details of cost-cutting measures and reductions in capital expenditure at the next interim report on 14 November, he added. “Everyone in the company – definitely not just the shareholders – will make a contribution to safeguarding our financial power over the long term.”
RWE is maintaining a forecast of earnings before interest, tax, depreciation and amortisation of â¬9 billion for the current financial year. Recurrent net income is expected to be â¬2.4 billion.