Corporate news: results for quarter 1/2024
Slightly lower earnings despite good water supply
Having posted the best result in its
history last year, VERBUND can look back on an extremely successful 2023 and is
starting 2024 strong, resilient and well-positioned. However, the energy market
value drivers that are key to VERBUND’s earnings have deteriorated compared to
the highs of 2022. The second half of 2023 saw another sharp fall in prices for
emission allowances and gas, which have a knock-on effect on wholesale
electricity prices. The marked decline in gas prices was driven by lower demand
as a result of the mild winter, Europe’s somewhat sluggish economy and
relatively high natural gas storage levels. Given these factors along with a
lower anticipated earnings contribution from regulated grid operations, the
earnings outlook for 2024 as a whole remains very healthy, but well below the
results for 2023.
Despite the changes in the energy market
environment, we are systematically forging ahead with our sustainable strategy
2030, which aims to strengthen our integrated positioning in the domestic market,
expand new renewables electricity generation in Europe and develop a green
hydrogen economy. Mission V, which we launched at the beginning of 2023,
is our roadmap for mastering the challenges ahead and pushing on with the grid
and energy transition.
VERBUND posted slightly lower quarter 1 results
in 2024 due to a weaker energy market environment. EBITDA fell by 8.7%
year-on-year to €883.4m. The Group result was down 4.3% to €506.0m. At 1.29,
the hydro coefficient for the run-of-river power plants was 36 percentage
points above the prior-year figure and 29 percentage points higher than
the long-term average. By contrast, generation from annual storage power plants
fell by 4.8% in quarter 1/2024 compared with the prior-year reporting period.
Generation from hydropower thus increased by 1,804 GWh to 7,893 GWh.
Earnings were hard-hit by the sharp drop in futures prices for wholesale
electricity that were relevant for the reporting period. Spot market prices
likewise retreated in quarter 1/2024. The average sales price achieved for
own generation from hydropower fell by €84.7/MWh to €118.1/MWh. Despite higher
generation from photovoltaic installations and wind power plants, particularly
those that came on stream in Spain, the earnings contribution from the New
renewables segment also declined slightly due to lower sales prices. A
significantly higher earnings contribution in the Sales segment had a positive
effect, partly due to lower procurement costs, while the contribution from the
Grid segment suffered from a significant drop in earnings at Gas Connect Austria GmbH. Earnings were also reduced by a lower
contribution from flexibility products.
Earnings forecast for 2024 adjusted
Based on expectations of average levels of own
generation from hydropower, wind power and solar power as well as the current
opportunities and risks identified, VERBUND expects EBITDA of between around
€2,800m and €3,300m and a Group result of between around €1,450m and €1,750m in
financial year 2024. VERBUND’s planned payout ratio for financial
year 2024 is between 45% and 55% of the Group result of between around
€1,450m and €1,750m, after adjusting for non-recurring effects.
The earnings forecast and the information on the expected payout ratio are contingent on VERBUND not being impacted by any
further measures to partially tax windfall profits at energy companies.