VERBUND, Austria's leading electricity company, once again continued its successful course in quarter 1-3/2005. Sales, operating result and share price all displayed double-digit growth thus proving once again that the company is well and correctly positioned in the deregulated European electricity market. VERBUND is now reaping the benefits of the restructuring measures that were implemented in the group over many years and the current conditions on the European electricity market.
More electricity sold to foreign customers
In quarter 1-3/2005, VERBUND once again significantly increased electricity sales in its target markets in Europe, above all, in Germany, France and Italy. Here in Austria, electricity sales continued to decline due to the drop in sales to provincial companies. Sales to foreign customers increased by 36 % to 20,206 GWh and therefore accounted for 50 % of the group’s total electricity sales.
VERBUND benefits from high wholesale prices
In quarter 1-3/2005, the wholesale prices for electricity once again rose significantly and reached a record level. VERBUND made full use of the increasing wholesale prices through the conclusion of market price indexed contracts and in this way, was able to successively realize the respective current market prices with a delay of approx. one year through forward contracts.
The significant rise in the wholesale prices is attributable, above all, to the sharp increase in the prices for the primary energy sources oil and gas. The high prices for CO2 certificates and the decreasing generation capacities in Europe also played a role in pushing up the wholesale prices.
First positive results for VERBUND-Stromvertrieb
Since 1 July 2005, VERBUND has also been supplying low-cost, environmentally friendly electricity from domestic hydropower directly to households, commercial enterprises and SMEs. After just three months in this new customer segment the first successes are already apparent: more than 8,000 customers have already opted for VERBUND electricity. Hence, it can be expected that the 10,000 mark will soon be cleared. VERBUND now aims to further spread its sales portfolio more widely in the next five years and improve its risk profile in a less price-sensitive customer segment.
Investments secure profitable growth
Within the framework of its strategy, VERBUND engages in numerous new projects that aim to secure profitable and sustainable growth in the future. All in all, VERBUND plans to invest € 1.4 billion in approx. one dozen construction projects in the coming years.
Excellent earnings trend and share price performance
In quarter 1-3/2005, earnings and the share price displayed a significant increase. Sales revenue increased by 17.2 % to € 1,770.8 million. The operating result rose by 39.0 % to € 394.7 million and the group result was up 44.0 % at € 275.5 million. And this in spite of the burdening effect of one-off measures for further restructuring within the group. The operating cash flow also developed very positively with an increase of 41.0 % to € 547.3 million - a clear indication of the company’s special financial power. The capital market reacted positively and the share price once again increased significantly - by 78.2 % to € 292.0 per share since the beginning of the year. Hence, over the last two years the VERBUND share has achieved a positive performance of 263.9 %.
Positive outlook for 2005
VERBUND has reiterated its positive outlook for the full year 2005. It is expected that the operating result for the full year 2005 will be up approx. 25 % on the value reported in the previous year. The group result is also expected to improve by approx. 30 %. On the basis of the current planning parameters, net gearing should be further reduced to below 100 %. In addition, VERBUND plans to increase the dividend once again.