Interim Report 3/2007: VERBUND continues growth development


Despite the prevailing difficult framework conditions, VERBUND is nonetheless able to present an improved result for quarters 1-3/2007 as compared to 2006.

Sales revenue rose by 5.8 % to 2,256.6 million Euro, the operating result improved by 6.1 % to 685.1 million Euro and the group result rose by 11.5 % to 457.9 million Euro.

Control relevant key figures developed as follows:

Key figures










Sales revenue




5.8 %

Operating result




6.1 %

Group result




11.5 %

Net gearing




-23.3 %

Operating cash flow




-24.2 %

The EBIT margin increased from 30.3 % to 30.4 %, the EBITDA margin, at 36.4 %, remained very high. The net gearing, as a result of borrowing activities to finance foreign business, rose from 70.4 % to 86.8 %. The operating cash flow, mainly as a result of higher income tax expenses, dropped by 24.2 % to 512.6 million Euro.

Hedging strategy secures higher selling prices
The spot market price on the German electricity exchange EEX in quarters 1-3/2007 came to an average of € 31.3/MWh for base load and was therefore 40 % down on the values recorded in the corresponding period the previous year. The prices for peak load dropped by almost 42 %. The weak spot market prices are mainly attributable to the decline in the prices of CO2 emission rights. Electricity prices are, however, expected to rise in 2008 due to the higher prices for CO2 emission rights for the second allocation period (2008 — 2012). As a result of its proven hedging strategy, VERBUND was able to increase the average selling price — approx. 60 % of the generated electricity was already sold in 2006 at high forward prices for 2007.

Water supply significantly below the long-term average
The average water supply of the rivers, which is measured with a hydro coefficient, continues to lie below the long-term average. Although the hydro coefficient in September was more than 20 % above the long-term average, following the strong decline in generation in the months of April to August, the hydro coefficient for quarters 1-3/2007, at 0.91, still remains 7 percentage points below the value reported in the corresponding period last year.

All in all, electricity generation from hydropower therefore dropped by 832 GWh to 18,519 GWh. Generation from thermal power plants also declined due to the weak spot market prices, dropping by 367 GWh to 2,669 GWh. At 21,188 GWh, the total generation of the Group was 5.4 % below last year's level.

End customer business expanded
On 16 August 2007, the buyback of electricity distribution company Austrian Power Vertriebs GmbH (APC) from Slovene energy group Istrabenz took place. By repurchasing the company, VERBUND was able to acquire an additional 100 key accounts and further expand its end customer business.

VERBUND expedites generation from renewable energy sources
The new subsidiary, VERBUND-Austrian Renewable Power (ARP), founded on 19 September 2007, aims to create new generation capacities with an output of up to 400 MW in Austria and abroad by 2015 using wind power, small-scale hydropower, solar power and biomass. The company will also invest in the research and development of innovative energy technologies.

Positive outlook for 2007
Despite an unfavorable market environment, Michael Pistauer, Chairman of the Managing Board of VERBUND, stands by his ambitious goals for fiscal 2007: "Provided that an average water supply for the remainder of the year is given, we aim to achieve a 10 % improvement in the operating result and a 15 % increase in the group result as compared with 2006."