Adhoc: VERBUND result for quarters 1–2/2014: Prices, water supply and expenses for the restructuring of the thermal portfolio weigh on result


The dramatic transformation of the European electricity markets is still ongoing. Profitability of conventional generation facilities in Europe is rapidly declining. The situation of gas power plants is a particularly precarious one.

In May, VERBUND approved the restructuring of thermal generation. This includes the temporary decommissioning of the combined cycle gas turbine power plants in Mellach, Austria, as well as in Pont-sur-Sambre and Toul in France. In addition, the Dürnrohr hard coal power plant and the Neudorf/Werndorf oil-fired district heating plant will be closed. 

Despite the measures that have been introduced, the results are showing a decline. EBITDA fell to €354.8m, and the Group result fell to €56.6m. The sharp decrease is primarily attributable to the considerable, positive non-recurring effects in 2013 resulting from the asset swap with E.ON. But even adjusted for these non-recurring effects, results are lower. Adjusted EBITDA declined by 33.4% to €421.0m, and the Group result fell by 62.6% to €93.6m. There are three main reasons for this: substantially lower hydropower generation due to lower water supply, the even lower wholesale prices for electricity as well as non-recurring expenses for thermal power plants.

Based on average own generation from hydropower in the second half of the year, our expectations now are for EBITDA to be approximately €690m and the Group result to be approximately €70m for financial year 2014. The planned payout ratio for 2014 remains at approximately 50% of the Group result of approximately €150m after adjustment for non-recurring effects.

Key figures Unit Q1–2/2013* Q1–2/2014* Change in %
Revenue €m 1,648.3 1,398.8 -15.1
EBITDA €m 806.2 354.8 -56.0
Operating result €m -78.7 196.7
Group result €m 406.4 56.6 -86.1
Earnings per share 1.17 0.16 -86.1
EBIT margin % -4.8 14.1
EBITDA margin % 48.9 25.4
Cash flow from operating activities €m 483.7 345.0 -28.7
Free cash flow after dividend €m 483.9 -322.8
Gearing % 73.8 78.2

Since 1 January 2014, IFRS 11 “Joint Arrangements” has replaced the previous rules under IAS 31 “Interests in Joint Ventures”. As a result of the new rules, the interest in Ennskraftwerke Aktiengesellschaft is to be classified as a joint operation. Thus, previously reported figures have been adjusted.

Although the result attributable to the French combined cycle gas turbine power plants is to be presented separately from continuing operations in accordance with IFRS 5, to enhance comparability, the key figures relate to the combined result from the Group’s continuing and discontinued operations.


Andreas Wollein Andreas Wollein

Head of Group Finance, M&A and Investor Relations

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