VERBUND 2013 results

3/5/2014vienna

In 2013, VERBUND was confronted with a difficult market environment. This was characterised by falling wholesale electricity prices – the result of massive overcapacity in electricity generation, an oversubsidisation of renewable energy and a non-functioning CO2 market. Unprofitable gas power plants also had an adverse effect on performance.

EBITDA improved year-on-year by 4.9% to €1,296.4m. EBITDA adjusted for non-recurring effects declined to €1,154.5m (–9.7%). The Group result increased by 49.0% to €579.9m. At €384.5m, the Group result adjusted for non-recurring effects was 38.5% lower than in 2012. Based on average own generation from hydropower, VERBUND expects the EBITDA for the financial year 2014 to be approximately €850m and the Group result to be approximately €150m.

Wolfgang Anzengruber, chairman VERBUND: In an extremely challenging market environment for energy suppliers VERBUND took important strategic decisions: Due to the successive asset swap we could realise more generation from water power and we could strengthen our position in our key markets Austria and Germany.  We focus on generation from renewable energies and do not further invest in CO2 emitting technologies. We continue our business-to-consumer and business-to-business approaches offering new products and innovative solutions and services.

Operating Business
The operating business was impacted by the good water supply in rivers in 2013. At 1.07, the hydro coefficient was 7.0% above the long-term average, but 4 percentage points below the prior-year comparative. Generation from hydropower nonetheless rose by 458 GWh as a result of the acquisition of shares in German hydropower plants on the Inn River. At 35,539 GWh, VERBUND’s total own generation in 2013 was 311 GWh higher than in the previous year.

The decline in wholesale electricity prices and the difficult economic environment for gas power plants put pressure on operating activities. In addition, the income trend was also influenced by significant non-recurring effects. Successful completion of the asset swap with German utility E.ON had a positive effect, while impairment losses resulting from impairment tests – particularly for gas power plants and the minority interest in the Italian company Sorgenia S.p.A. – had a negative effect.

EBITDA improved year-on-year by 4.9% to €1,296.4m. EBITDA adjusted for non-recurring effects declined to €1,154.5m (–9.7%).

The Group result increased by 49.0% to €579.9m. At €384.5m, the Group result adjusted for non-recurring effects was 38.5% lower than in 2012.

Dividend for 2013
As announced, a dividend of €1 per share will be proposed for financial year 2013 at the Annual General Meeting on 9 April 2014. This dividend will be made up of a basic dividend of €0.55 per share plus a special dividend of €0.45 per share. The reason for distributing a special dividend is the successful completion of the asset swap with E.ON in 2013.

Focus on renewable energies, key markets and innovation

Appoximatly 90 % of the VERBUND generation stem from renewable energy like water- and windpower. The company does not further invest in CO2 emitting technologies. 2014 foresees measures to increase the efficiency of existing hydro power plants as well as the completion of the 430 MW pumped storage hydro power station Reißeck II. VERBUND focuses on the key markets Austria and Germany. With innovative products and solutions for both the household- and the business-segment VERBUND opens new markets.

Outlook for 2014
Based on average own generation from hydropower, we expect EBITDA for financial year 2014 to be approximately €850m and the Group result to be approximately €150m. For 2014, we are planning a payout ratio of around 50% of the Group result adjusted for non-recurring effects.

Key figures Unit 2012 2013 Change in %
Revenue €m 3,174.3 3,269.9 3.0
EBITDA €m 1,235.4 1,296.4 4.9
Operating result €m 900.2 147.1 –83,7%
Group result €m 389.3 579.9 49.0
Earnings per share 1.12 1.67 49.0
EBIT margin % 28.4 4.5
EBITDA margin % 38.9 39.6
Cash flow from operating activities €m 1,034.7 837.4 –19,1%
Free cash flow €m –164,4 546.7
Gearing % 64.9 66.1
(Proposed) dividend per share 0.60 1.00 66.7
Ingun Metelko Ingun Metelko

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