Q1–3/2011: Operating result up despite weak water supply


VERBUND presents an improved operating result for quarters 1–3/2011 despite weak water supply.

The operating result was influenced by impairment tests on VERBUND power plants, while the Group result was impacted by negative measurement effects and foreign currency losses. 

Key figures Unit



Change in %

Revenue € m




Operating result before effects from impairment tests € m




Operating result
€ m




Return on sales (EBIT margin)








EBITDA margin % 29.2


Group result € m




Earnings per share




Cashflow from operating activities € m




Gearing %
 81.4 151.9  -

Changes in the energy market environment led to special effects due to impairment tests
The value of VERBUND’s hydropower plants changed positively for the long term after Germany’s phase-out of nuclear energy. This is confirmed on the one hand by the significant commitment of decision-makers to expand renewable energy and on the other hand by the higher sales margins of certified electricity generation from hydropower.

In addition, VERBUND currently presumes that a positive regulatory environment for renewable energies will still be existent in the future. In order to account for this operating environment, the Danube power plant Freudenau and the run-of-river power plant chains Mittlere Salzach and Obere Drau were tested for impairment. These power plants were written down by €480.9m in the course of the deregulation of the European electricity industry in 1998.

The reversal of impairment losses (requirement to reverse impairment losses) resulting from the current impairment test amounts to a total of €312.6m. At the same time, the market conditions for gas power plants in Europe have deteriorated. Therefore, the combined cycle gas turbine power plant under construction in Mellach was tested for impairment as at 30 September 2011 due to the current difficult market situation for gas power plants. The write-down resulting from the impairment test amounts to a total of €110.3m.

Adjusted and unadjusted operating result improved despite weak water supply
The operating result is influenced by the effects of impairment tests described above and at €847.6m is up 35.5% over the prior year’s level. Adjusted for the net positive effects from impairment tests, the operating result is €19.4m or 3.1% over the prior year’s amount, despite the extraordinarily weak water supply. This can be attributed mainly to internal cost-savings, increased generation from thermal power plants and higher electricity prices on the spot market.

At 0.88, the water supply in quarters 1–3/2011 was 12% below the long-term average and 9 percentage points below the previous year’s level. Therefore, the run-of-river power plants generated less electricity. Generation from storage power plants was also 6.7% below the prior year’s level. Overall, VERBUND’s electricity generation from hydropower fell 7.9% year-on-year to 18,883 GWh. In contrast, generation from thermal power increased by 17.4% to 3,478 GWh.

Group result negatively impacted by result from equity interests
The Group result fell 6.2% to €313.3m in quarters 1–3/2011 year-on-year. This development can be attributed mainly to negative effects from foreign interests accounted for using the equity method. For instance, the existing natural gas supply agreement for the Pont-sur-Sambre combined cycle gas turbine power plant in particular had to be recognised at fair value through profit or loss for the first time in quarter 3/2011. In addition, above all non-cash-related foreign currency measurements as a result of the further sharp depreciation of the Turkish lira against the euro impacted the result from equity interests in Turkish joint ventures.

Outlook on the full year
For 2011 overall, VERBUND expects an operating result of around €1bn (excluding effects from impairment tests: around €800m) and a Group result of around €380m. The calculations were based on an average water supply for the remaining year. Dividends will be oriented on a payout ratio of 45% to 50%.


Andreas Wollein Andreas Wollein

Head of Group Finance, M&A and Investor Relations

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