VERBUND results for quarters 1–2/2017

7/27/2017Vienna

Solid income trend despite challenging environment

VERBUND recorded a solid income trend in quarters 1–2/2017 despite the fact that the water supply was well below average. Earnings were positively impacted by higher revenue from flexible products, above all congestion management products, as well as thermal restructuring. EBITDA thus decreased from €450.2m to €415.9m, a decrease of 7.6%. EBIT increased by 27.5% to €243.3m, and the Group result was up by 0.4% on the prior-year period to €154.5m. Assuming an average supply of both wind and water in the second half of 2017, EBITDA will amount to approximately €830m and the Group result to approximately €300m in financial year 2017.


The upheaval in the energy market, the expansion of renewable energy sources, the trend towards decentralised generation and progressive digitalisation are continuing unabated. This is causing rising volatility, which is posing an increasing risk to grid stability and leading to greater demand for flexible products.

70 years of VERBUND. Energising the future.

VERBUND is celebrating its 70th anniversary in 2017. The Group has been shaping the future of energy for the coming generations ever since its establishment as Österreichische Elektrizitätswirtschafts-AG back in 1947. VERBUND is optimally positioned to continue doing so in the coming decades thanks to its strong basis in renewable hydropower. VERBUND moreover makes a key contribution to balancing the increasingly volatile electricity grids based on its leading-edge, flexible power plant portfolio consisting of storage and pumped storage power plants and the Mellach thermal power plant.  

Partnerships and innovation 

The first half of 2017 was shaped by forward-looking energy and industrial alliances formed with voestalpine, an Austrian technology and industrial goods group, and OMV, an internationally integrated oil and gas company. Together with voestalpine and Siemens, VERBUND plans to work on realising an EU-subsidised hydrogen pilot plant at voestalpine’s site in Linz for the purpose of testing the possibilities for using green hydrogen. In April, OMV announced that it would be taking a stake of around 40% in SMATRICS, Austria’s leading provider of electromobility charging networks and a VERBUND subsidiary.
In June, VERBUND launched VERBUND-VISION, a digital platform developed in-house for business customers to assist them in optimising their trading and sales processes. VERBUND-VISION offers an even more modern and transparent market access option for VERBUND’s large corporate customers, which include municipal utilities, industrial customers and local suppliers of wind and solar power. 
In Austria, VERBUND has a market share of 8% in the retail customer segment with around 419,000 customers and a share of approximately 20% in the corporate customer segment. In Germany, VERBUND is the leading supplier of green electricity for resellers and corporate customers.

Income trend

VERBUND recorded a solid income trend in quarters 1–2/2017 despite the fact that the water supply was well below average. At 0.89, the hydro coefficient representing the water supply from rivers was 10 percentage points below the level for quarters 1–2/2016 and down 11% on the long-term average. Generation from hydropower therefore decreased by 1,477 GWh. VERBUND’s total own generation declined by 4.7% to 15,132 GWh compared with the same period in the previous year. Even though thermal generation increased significantly and generation from new renewable energy sources was also up, this was not sufficient to compensate for the decrease in hydropower generation. Lower earnings in the Grid segment also had a negative impact on the result. By contrast, earnings were boosted by higher revenue from flexible products, particularly congestion management products, as well as by the restructuring of thermal operations. EBITDA decreased by 7.6%, from €450.2m to €415.9m. EBIT increased by 27.5% to €243.3m, and the Group result was up by 0.4% on the prior-year period to €154.5m.  

Outlook for 2017

We are maintaining our earnings forecast for full-year 2017. Assuming an average supply of both wind and water in the second half of 2017, we expect EBITDA in financial year 2017 to amount to approximately €830m and the Group result to approximately €300m.
 
Key figure Unit Q1-2/2016 Q1-2/2017 Change in %
Revenue €m 1,460.7 1,476.4 1.1
EBITDA €m 450.2 415.9 -7.6
Operating result €m 190.8 243.3 27.5
Group result €m 153.9 154.5 0.4
Earnings per share 0.44 0.44 0.4
EBIT margin % 13.1 16.5
EBITDA margin % 30.8 28.2
Cash flow from operating activities €m 476.6 385.1 -19.2
Free cash flow before dividends €m 364.8 273.6 -25.0
Gearing % 64.2 54.7
Additional information and the Interim Financial Report for quarters 1–2/2017 can be found at www.verbund.com > Investor Relations > Latest financial results.
Ingun Metelko Ingun Metelko

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