The difficult economic environment for VERBUND continued to worsen in the first quarter. The level of wholesale prices for electricity has further declined. Three factors in particular are responsible: excessive subsidies for new renewable energy sources, excess capacities in the European electricity market and the non-functioning CO2 market in Europe. Neither the stabilisation of emission trading in the form of “backloading” resolved by the EU nor the planned reform of the green energy subsidies in Germany suffice to improve the energy market environment.
The operating business was characterised by a below-average water supply from rivers in quarter 1/2014. The hydro coefficient of 0.93 was 7.0% below the long-term average and 27 percentage points below the previous year’s level. Generation from hydropower consequently fell by 1,077 GWh. In total, VERBUND’s own generation of 6,544 GWh in quarter 1/2014 was 22.9% lower than in the first quarter of the previous year. The negative operating environment is also reflected in falling average contract prices. Thus, EBITDA fell significantly by 33.9% to €207.1m and the Group result of €40.9m for the first quarter was down 46.8% year-on-year.
Outlook for 2014 confirmed
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. A payout ratio of around 50% of the Group result after adjustment for non-recurring effects is planned for 2014.