VERBUND raises earnings forecast and dividend for 2014
VERBUND AG’s management is today announcing that it is raising its earnings forecast for financial year 2014. Based on the updated planning, VERBUND is set to generate EBITDA of around €770 million (previous forecast: €690 million) and a Group result of around €85 million (previous forecast: €70 million) in 2014. The planned dividend continues to be based on a payout ratio of approximately 50% of the adjusted Group result, which will be around €190 million for 2014 (previous forecast: €150 million).
These changes to the earnings forecast are mainly due to the following:
Better water supply
At 1.10, water supply was above the long-term average in the third quarter of 2014. Over the remainder of the year, water supply is expected to be average. The new earnings forecast is therefore based on a hydro coefficient of 0.99 for 2014 as a whole. EBITDA is positively impacted to the tune of around €20 million and the Group result to the tune of around €10 million.
Positive effects in connection with the sale of the French combined cycle gas turbine power plants
On 6 October 2014, VERBUND and KKR agreed on the sale of the French Pont-Sur-Sambre and Toul CCGTs. The contracts were signed on 13 October 2014. This sale, which took place based on the power plants’ carrying amounts, resulted in the recognition of a positive, one-off tax effect. Group result is positively impacted by the sale of the French CCGTs to the tune of around €105 million.
Impairment loss on the wind farms in Romania
Regulatory intervention in the market for green electricity certificates by the Romanian government and a massive surplus of green electricity certificates are pushing down revenue at VERBUND’s Romanian wind farms. Due to trigger factors, an impairment test was performed, revealing the need to recognise a write-down. This depresses the Group result by around €144 million.
Positive effects from the electricity business
Higher than planned margins from the electricity business have a positive effect on the earnings development. EBITDA is positively impacted to the tune of around €30 million and the Group result to the tune of around €20 million.
Higher-than-planned cost savings
In addition, the positive effects on earnings achieved through the systematic programme to reduce costs were higher than planned. This lifted EBITDA by around €25million and the Group result by around €15 million.
The effects in connection with the sale of the French combined cycle gas turbine power plants and with the impairment loss on the wind farms in Romania are already fully included in the result for quarters 1–3/2014, which will be published on 29 October 2014.