DGAP-News: EVN AG: Business development Q. 1-3 2012/13
(firmenpresse) - DGAP-News: EVN AG / Key word(s): Quarter Results
EVN AG: Business development Q. 1-3 2012/13
29.08.2013 / 08:00
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Highlights
- Results from operating activities at prior-year's levels; negative
financial results burdened Group net profit
- Provision for reserve capacity for Germany over the next three winter
half-years
- International arbitration proceedings in Bulgaria
- Difficult progress on environmental projects in Moscow
- Duisburg-Walsum coal-fired power plant - planned commercial start of
operations in Q. 1 2013/14
- 100th wind turbine under construction - expansion of total wind power
capacities to up to 213 MW
- Standard&Poor's and Moody's rating confirmed (BBB+, A3) with stable
outlook
Key figures
Revenue: -2.3% to EUR 2,204.5m
EBITDA: -3.2% to EUR 415.1m
Results from operating activities (EBIT): +0.1% to EUR 238.8m
Group net profit: -34.8% to EUR 145.2m
Outlook 2012/13: Group net profit approximately 40% below prior year
Energy sector development
The spot market prices and forward market prices for base load and peak
load electricity remained on a downward trend throughout the reporting
period. This latest decline resulted, above all, from the increased
generation of electricity from renewable energy - in particular from
photovoltaic sources - and weaker demand from the industrial sector in
Germany. The spot market prices fell by 14.1% to EUR 38.8 for base load
electricity and by 9.8% to EUR 50.2 per MWh for peak load electricity. The
forward market prices for base load and peak load electricity were at EUR
49.6 and EUR 61.5 per MWh, or 12.3% and 11.8% below the previous year. The
price for crude oil fell by 2.7% to EUR 82.8 per barrel. Natural gas prices
in Austria, which are linked in part to the price of oil, traded at EUR
30.0 per MWh in the first three quarters of 2012/13, or 3.9% higher than
the previous year. The price of coal fell by 23.4% to EUR 65.1 per tonne
due to the high stock levels in Europe and weaker demand in Asia. The
downward trend in the price of CO2 emission certificates continued, with a
32.3% decline below the prior year to EUR 5.6 per tonne.
Revenue decrease despite a slight improvement in energy revenues
EVN generated revenue of EUR 2,204.5m in the first three quarters of the
2012/13 financial year. This represents a year-on-year decline of EUR
52.3m, or 2.3%, which occurred despite a slight improvement in energy
revenues. It resulted primarily from a comparatively lower volume of final
invoices in the international environmental project business, the pass on
of lower additional costs for renewable electricity through price
reductions and lower sales volumes of marketed natural gas. In addition,
the comparable prior-year period also included revenue from the sale of
first facility GmbH in summer 2012. The increase in energy revenue
reflected higher revenues in South Eastern Europe that resulted, above all,
from price increases for end customers in Macedonia in the previous year
and from higher sales volumes in the Austrian heating business.
Results from operating activities (EBIT) at prior-year's level; Group net
profit burdened by negative financial results
The other operating income rose due to higher level of inventories at the
closing date. The cost of materials and services declined due to the
scheduled completion of projects in the international project businessin
the previous year. Operating expenses were increased by higher expenditures
for energy and higher other operating expenses. This position was
influenced by an addition to provisions for impending losses on the sale of
EVN's own production and by additional costs of renewable electricity in
Bulgaria. The above factors led to an EBITDA-decline of 3.2% to EUR 415.1m.
After the deduction of lower depreciation and amortisation - the previous
year was burdened by impairment charges - EBIT totalled EUR 238.8m and
nearly matched the prior year.
Financial results fell from EUR 53.2m to EUR -21.0m. This decline is
chiefly attributable to the following factors: the negative earnings
contribution of EUR 20.4m from EconGas that was recognised in the first
quarter of 2012/13 and the one-time negative effect of EUR 27.5m due to the
sale of the 50% investment in the Albanian Devoll hydropower plant project.
In addition, the negative earnings contribution from WEEV Beteiligungs GmbH
rose by EUR 6.9m after the balance sheet date on March 31st, 2013 to equal
EUR 29.4m. This resulted from a valuation-related impairment charge to the
Verbund shares held by WEEV, which was recognised to reflect a significant
and lasting decline in the price of these shares below their cost. Group
net profit totalled EUR 145.2m and was 34.8% lower than the comparable
prior-year period.
Positive cash flow development
Gross cash flow rose by 12.0% to EUR 498.4m in the first three quarters of
2012/13, in spite of the decline in profit before income tax. This increase
was supported by high non-cash expenses from EconGas, WEEV and Devoll that
are included under the share of profit from equity accounted investees as
well as a change in non-current provisions. Net cash flow from operating
activities was 38.8% higher for the reporting period. This development
reflected the lower year-on-year growth in working capital as of June 30th,
2013. EVN's balance sheet total equalled EUR 6,923.3m as of June 30th, 2013
which is 0.9% higher than the level on September 30th, 2012. Equity
declined by 0.2% to EUR 3,008.0m; the equity ratio equalled 43.4%. Due to
the positive cash flow from operating activities and lower investments net
debt declined to EUR 1,588.8m (September 30th, 2012: EUR 1,703.7m),
resulting in a gearing of 52.8% (September 30th, 2012: 56.5%).
Developments in the energy and project business
The provision of 785 MW in reserve capacity for the next three winter
half-years to supply Southern Germany with energy on demand will open new
opportunities for EVN in the changing European energy market. The operation
of the gas-fired power plants would otherwise not be profitable due to the
continuing negative spread between primary energy procurement costs and
electricity prices.
The commissioning of the Duisburg-Walsum coal-fired power plant continued
during the reporting period. After an examination of the turbines, the
general contractor Hitachi cleared the equipment for stress tests and full
load status under coal-firing has already been reached. This unscheduled
inspection was considered necessary by Hitachi because of damages at two
similar machines in Japan. However, it will delay the commercial start-up
by at least one month.
In Lower Austria, EVN is now installing its 100th wind power turbine in a
new wind park near Deutsch-Wagram. Five 3 MW wind turbines will be built at
this location together with a partner. The new equipment will be able to
supply roughly 10,000 households with environmentally friendly electricity.
When this project is completed, EVN will have 14 wind parks with a total
capacity of 213 MW in operation.
Annual price adjustments by the regulatory authorities in South Eastern
Europe led to a reduction in the electricity prices for end customers by an
average of 3.0% in Macedonia and an average of 4.2% in Bulgaria. However,
there was no equivalent change in procurement prices. These price
adjustments will require further efficiency improvements and lead to the
revision of investment plans. As of August 1st, 2013 the regulatory
authorities in Bulgaria also introduced a new mechanism to cover the
additional production costs resulting from renewable energy sources, but
this change is not expected to result in additional expenses for EVN. The
existing claims by EVN are being pursued in arbitration proceedings at the
International Center for the Settlement of Investment Disputes, an
organisation established by the World Bank.
Discussions are also continuing with the city of Moscow over the
realisation of the environmental projects in this city. The main issues
involve the still outstanding building permit for the waste incineration
plant and the commercial start-up of the completed sodium hypochlorite
production plant.
Outlook
The continuing disruptions on the European energy markets represent major
challenges for the industry. These challenges involve the demand-driven
management of production forms that are becoming increasingly difficult to
plan while maintaining supply security and dealing with a continuously
changing market environment. The structural and sustainable adjustment of
the market design will be the main topic within the upcoming years.
As announced in April 2013, we expect a decline of roughly 40% in Group net
profit for the 2012/13
financial year.
EVN's Letter to Shareholders Q. 1-3 2012/13 is available at
www.investor.evn.at.
End of Corporate News
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Language: English
Company: EVN AG
EVN Platz
2344 Maria Enzersdorf
Austria
Phone: +43-2236-200-12294
Fax: +43-2236-200-82294
E-mail: info(at)evn.at
Internet: www.evn.at
ISIN: AT0000741053
WKN: 074105
Indices: ATX
Listed: Foreign Exchange(s) Wien (Amtlicher Handel / Official
Market)
End of News DGAP News-Service
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