VERBUND Results, Quarters 1-2/2015

7/29/2015Vienna

Markedly positive earnings trend despite challenging underlying conditions

VERBUND, Austria's leading energy company and one of the largest producers of hydropower in Europe, was able to raise the EBITDA by 37.9% to € 489.1 million in the first half of 2015. The consolidated result exceeded that of the comparable quarters of the previous year by 246.6% at € 196.3 million. For the fiscal year 2015, the company anticipates in the second half of the year an EBITDA of about € 850 million and a consolidated result of about € 240 million on the basis of an average owned generation from hydropower.

In quarters 1-2/2015 too, little changed in the challenging circumstances in the European energy market. Low wholesale prices and margins, resulting from low prices for primary energy sources and C02 certificates, heighten the pressure on the profits of energy enterprises. At the same time, the capacities for energy generation in Europe are growing even larger – still above all through heavily subsidized sun and wind energy.

Consistent implementation of the strategy
Within these challenging circumstances, VERBUND has consistently and successfully continued on the path, decided on in 2014, to becoming a C02-free, affordable, and innovative electricity provider.
The operational business performance in quarters 1-2/2015 was positive despite the further dropping of selling prices and reflects the successful implementation of the strategy. The efficiency-enhancement measures, which above all significantly reduced the staff expenses and other operational costs, as well as the further successful implementation of thermal restructuring, positively influenced business performance in the concern. Thus the VERBUND block of the Dürnrohr coal-fired power plant ended operational activity on 30.4.2015.
Additional earnings from the increasingly volatile energy market through the attainment of higher profits by commercialising control energy, balance energy, as well as congestion management, likewise increased the final result. Furthermore, the positive trend was facilitated by short-term earnings effects, such as from the liquidation of accrued liabilities because of anticipated procedural adjustments in the grid area.
And, finally, the above-average flow volume of water also had a positive effect. The hydro coefficient of 1.03 exceeded the long-time average by 3.0% and the comparable value of the period from the previous year by 10%. The generation from hydropower thus rose by 1,039 GWh. More than 90% of the generated electricity came from renewable energy. In total, VERBUND's owned generation in the first half of the year was, at 17,217 GWh, 10.5% high than in the first half of the previous year.
Positive non-recurring effects from the liquidation of accrued liabilities because of anticipated procedural adjustments in the grid area account for the fact that adjusted result increased less severely than did the unadjusted result. 
The EBITDA rose because of the above-mentioned effects by 37.9% to € 489.1 million, and, adjusted for non-recurring effects, by 5.0% to € 442.1 million.The consolidated result likewise exceeded that of the comparable quarters of the previous year at € 196.3 million by 246.6%, and adjusted for non-recurring effects, at € 161.2 million by 72.3%. The marked improvement in interest expenses, partly because of the notably improved cash-flow situation, as well as positive tax effects, are also reflected in the positive trend of the consolidated results.  

Customer focus and energy partnerships
VERBUND is constantly expanding its offerings in environmentally-friendly energy products, such as electricity from 100% hydropower and climate-neutral natural gas, as well as innovative energy services. In Austria, the company has a market share of 7% in the small customer segment and in the corporate customer segment, a market share of around 20%. In Germany, the most important international market for VERBUND, the company is the leading provider of flexibility and green energy for distributors and corporate customers. 
At the beginning of July 2015, VERBUND acquired a 50% share in SOLAVOLTA, Austria's market leader for photovoltaic solutions. VERBUND thus takes another important step as the market-leading provider of C02-free offerings.

Outlook for 2015 confirmed
For the fiscal year 2015, as made public in the ad hoc release on 09.07.2015, VERBUND anticipates in the second half of the year an EBITDA of about € 850 million and a consolidated result of about € 240 million, on the basis of an average owned generation from hydropower.The planned dividend payout rate for 2015 remains unchanged at around 50% of the consolidated results adjusted for non-recurring effects, about € 240 Million.

Key figure Unit Q1-2/2014** Q1-2/2015 Change in %
Revenue* €m 1,416.1 1,405.4 -0.8
EBITDA €m 354.8 489.1 37.9
Operating result €m 196.7 303.7 54.4
Group result €m 56.6 196.3 246.6
Earnings per share 0.16 0.57 246.6
EBIT margin* % 13.9 21.6
EBITDA margin* % 25.1 34.8
Cash flow from operating activities €m 345.0 421.8 22.2
Free cash flow after dividends €m -322.8 304.9
Gearing % 78.2 71.9
* The comparable information were adjusted in retrospect in compliance with IAS 8. ** For the calculation of the indicators, the result after income taxes from activities not to be continued (equivalent to the result after income taxes that is to be attributed to the French corporations Pont-sur-Sambre Power S.A.S and Toul Power S.A.S, categorized as "held for sale," until their deconsolidation in the previous year) were included.
Further information as well as the interim report 1-2/2015 are to be found on www.verbund.com > Investor Relations > Current financial result.
Ingun Metelko Ingun Metelko

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