Compared to 2008, sales declined by 7.0 % to € 3,483.1 million, the operating result fell by 8.5 % to € 1,042.3 million and consolidated net profit was down 6.2 % to € 644.4 million. Earnings development in the past fiscal year was largely influenced by three factors: low European wholesale prices for electricity, an above-average water supply and one-off accounting measures.
- 8.5 %
Consolidated net profit
Operating cash flow
(Proposed) dividend per share
Despite these lower results, VERBUND would like to reinforce the confidence of its shareholders and will therefore propose to the Annual General Meeting an increase in the dividend from € 1.05 per share to € 1.25 per share - € 1.00 per share in regular dividends and € 0.25 per share in special dividends.
Strong position reinforced, further long-term strengthening planned
In this difficult environment, VERBUND continued to press ahead with its growth projects in Austria and abroad in 2009 and also successfully expanded its market position in key strategic markets.
In Austria, VERBUND successfully adhered to its strategy, investing in the expansion of hydropower generation, the extension of the high-voltage grid and the strengthening of the company's distribution and trading activities. At the end of 2009, VERBUND supplied Austrian hydropower to 225,000 end customers. This corresponds to an increase of 25 % compared to 2008. By 2015, VERBUND will invest almost two billion euro in Austria.
The completion of the 380 kV ring is a key project. Following the commissioning of the Styria line in autumn 2009 and the commencement of the construction work for the first section of the Salzburg line in summer 2009, the optimal route for the second section is now being planned in cooperation with the municipalities.
The construction of the subterranean pumped-storage power plant Limberg II in Kaprun (480 MW) is running smoothly. The plant will be completed and connected to the grid as early as 2011. Moreover, a series of hydropower projects are currently being developed in Austria. The construction of the gas combined cycle power plant Mellach (800 MW) in Styria is progressing according to schedule and the project will be completed in 2011.
Important long-term electricity contracts were also concluded in 2009, thus securing part of own electricity production in the long term. From 2010 to 2013, VERBUND will supply 10 TWh of hydropower to the provincial suppliers EVN and Wien Energie. The supply agreement with Austrian Federal Railways was extended for a further four years for a total volume of 4.4 TWh. A series of electricity supply agreements were also concluded with major industrial companies with the result that VERBUND has now secured a market share of approximately 25 % in the Austrian industry segment.
With the purchase of 13 hydropower plants on the River Inn in Bavaria from the German Supplier E.ON, VERBUND completed the largest acquisition in the company's history. In so doing, VERBUND reinforced its position as one of the most important hydropower generators in Europe and cemented its strong market presence in Germany, the company's key foreign market. The acquired power plants have a total capacity of 312 MW, meaning that VERBUND has increased its annual electricity generation from renewable hydropower by around 1,850 GWh.
VERBUND also strengthened its involvement in the joint ventures in Italy, Turkey and France. On the Italian market, VERBUND increased its stake in the Sorgenia Group, the fourth largest electricity supplier in Italy, from 43 % to approximately 45 % by means of a further capital increase.
In Turkey, VERBUND swiftly implemented the investment programme at the power generation company Enerjisa and the restructuring of the distribution company Baskent EDAS, which was purchased in January 2009, as part of its partnership with the Sabanci Group based in Turkey: from the end of 2010, the 919 MW Bandirma gas power plant and the Canakkale wind farm will be the next generation facilities to supply electricity, followed by six hydropower plants by 2012.
In France, VERBUND increased its stake in Poweo S.A., the largest independent electricity supplier in France, to 46.0 % and assumed control of operations. A key milestone was the commissioning of the first gas-steam power plant to be erected in France, the 412 MW Pont-sur-Sambre power plant, in autumn 2009.
Average selling price below level of previous year
In 2009, wholesale prices for electricity, in particular short-term forward and spot market prices, declined significantly compared with the previous year. The low level came as a result of a significant reduction in prices for primary energy sources, lower demand for electricity and the fall in the price of CO2 certificates.
However, a good proportion of the electricity generated by VERBUND was sold one year in advance at considerably higher prices in accordance with the company's hedging strategy, thereby cushioning the negative impact of the weaker short-term prices. In 2009, the average selling price was € 61.3/MWh. The average contract price for the full year 2008 came to € 63.3/MWh. On 31 December 2009, 64 % of own generation for fiscal 2010 had already been sold at an average price of € 54.5/MWh.
Water supply above the long-term average
The above-average water supply from the rivers that are used to produce energy had a positive impact on the result. The hydro coefficient for 2009 lay at 1.06 and was therefore 6 % higher than the long-term average and 5 % higher than the figure recorded in the previous year. The acquisition of the Bavarian power plants on the River Inn with effect from September 2009 also had a positive impact on generation at the run-of-river plants. Hydropower generation within the VERBUND Group therefore rose by a total of 7.1 % or 1,790 GWh. Thermal generation declined by 19.0 % or 638 GWh compared to the previous year on account of the lower spot market price level. In 2009, generation from wind and sun came to 106 GWh. In total, own generation increased by 1,258 GWh to 29,918 GWh.
Result burdened by one-off accounting measures
As in 2008, the earnings development of the VERBUND Group was marked by one-off accounting measures: these had an adverse effect on the operating result in the total amount of approx. € 60 million and the financial result was burdened in the amount of approx. € 10 million.
The one-off effects in the operating result were due primarily to the 2009 amendment to the System Utilisation Tariff Directive 2006, under which the system utilization tariffs in the electricity area were re-determined starting from 1 January 2009. Unscheduled maintenance and a value adjustment of the existing stocks of coal also had a negative impact on the operating result.
The negative one-off effects in the financial result are attributable, above all, to the negative result generated by the POWEO Group as well as expenses for restructuring in the investment area.
In fiscal 2009, VERBUND reacted to the economic crisis and significantly reduced its investment programme for 2010 to 2015 to € 2.7 billion. In spite of this, VERBUND will continue to invest in the expansion of domestic hydropower, the high voltage grids and the existing international activities in Turkey, Italy and France. The company aims to have all power plants operational when the economy in Europe once again displays growth so that it can benefit from the increasing wholesale prices.
On the basis of the difficult conditions and due to the significantly lower forward prices for electricity, VERBUND expects a clear drop in the operating result and consolidated net profit as well as a lowering of the dividends in fiscal 2010 despite the restructuring measures and the reduced investment programme.