Corporate news: VERBUND results for quarters 1-3/2023


Strong income trend with improved outlook for 2023

The energy system is currently undergoing a comprehensive transformation stemming from the dilemma of how to balance climate action and decarbonisation plus achieving greater energy independence with the need to maintain security of supply. A key component of the shift to an essentially carbon-free energy system is large-scale expansion of electricity generation from photovoltaic and wind power as well as hydropower. However, expanding new renewable electricity generation on this scale is making the European power grid far more volatile – something that can only be mitigated through major expansion of the power grid and the use of storage technologies or flexible electricity generation facilities such as pumped storage power plants. VERBUND has earmarked around €15bn for investment over the coming decade so that it can advance decarbonisation efforts and continue to guarantee security of supply in Austria.

A strong earnings position is an important prerequisite to be able to finance and hence implement the investments needed for decarbonisation and security of supply, and this is what VERBUND is reporting for quarters 1–3/2023. EBITDA climbed by 83.6% year-on-year to €3,549.3m. The reported Group result rose by 85.9% to €1,980.6m and the Group result after adjustment for non-recurring effects was up 103.6% (non-recurring effects in Q1–3/2023: €–20.2m; Q1–3/2022: €+82.6m). The positive income trend compared with the previous year is attributable primarily to higher electricity production on the strength of a better water supply, the rise in average sales prices, higher earnings contributions from the acquisition and commissioning of the new renewable generation facilities and improved earnings contributions from regulated infrastructure (electricity and gas grids).

At 0.93, the hydro coefficient for the run-of-river power plants was 7 percentage points below the long-term average but 9 percentage points above the comparative prior-year figure. Generation from the annual storage power plants rose by 7.1% in quarters 1–3/2023 compared with the prior-year reporting period. Generation from hydropower plants thus increased by 2,266 GWh to 23,102 GWh. The sharp rise in futures market prices on the wholesale market that were relevant for the reporting period gave earnings a considerable boost. Conversely, spot market prices fell in quarters 1–3/2023. The average sales prices obtained for VERBUND’s own generation from hydropower rose by €64.4/MWh to €176.0/MWh. Higher generation from photovoltaic installations and wind power plants, especially from the facilities purchased and put into operation in Spain, also had a positive effect. In addition, higher earnings contributions from Gas Connect Austria GmbH and Austrian Power Grid AG in the Grid segment had a positive impact. This stood in contrast to the reduction in earnings caused by a significant decrease in thermal generation and the negative earnings contribution from the Sales segment attributable to high procurement costs, among other factors. The measures to tax windfall profits likewise had an aggregate negative impact of around €77m on EBITDA.

Earnings outlook for 2023 raised:

Based on average own generation from hydropower, wind power and photovoltaic production in quarter 4/2023 and the opportunities and risks identified, VERBUND expects EBITDA of between approximately €4,150m and €4,450m and a reported Group result of between approximately €2,250m and €2,450m in financial year 2023. VERBUND’s planned payout ratio for financial year 2023 is between 45% and 55% of the Group result of between around €2,270m and €2,470m, after adjusting for non-recurring effects.

The earnings forecast and the information on the expected payout ratio are contingent on VERBUND not being impacted further by possible energy policy measures to skim off some of the profits at energy companies.
KPIs Unit Q1-3/2022 Q1-3/2023 Change in %
Revenue €m 7,617.3 9,789.9 28.5
EBITDA €m 1,933.3 3,549.3 83.6
Operating result €m 1,621.7 3,145.9 94.0
Group result €m 1,065.2 1,980.6 85.9
Earnings per share 3.07 5.70 85.9
EBIT margin % 21.3 32.1
EBITDA margin % 25.4 36.3
Cash flow from operating activities €m 1,120.8 4,153.4
Free cash flow before dividends €m -150.5 3,018.7
Free cash flow after dividends €m -628.4 1,475.0
Performance of the VERBUND-share % -11.6 -2.0
Gearing % 89.6 23.3
Additional information as well as the Interim Financial Report for quarters 1–3/2023 is available at > Investor Relations > Latest financial results.

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Andreas Wollein Andreas Wollein

Head of Group Finance and Investor Relations

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