Conditions in the European electricity market remained difficult during quarters 1–3/2015. Low prices for primary energy sources and CO2 emission rights have led to a further decrease in wholesale prices on the futures market and have negatively impacted energy companies’ incomes. Moreover, the volatile nature of energy generation from power plants producing renewable energy means that greater flexibility is needed in grid operations. This situation also presents opportunities that VERBUND succeeded in taking advantage of during the reporting period to generate additional income by means of flexible products such as control power and balancing energy and by selling congestion management services.
Despite a further decline in sales prices, the performance of the operating business showed a clear upward trend in quarters 1–3/2015 due to the successful implementation of VERBUND’s strategy. The business trend was positively impacted by the Group’s measures to increase efficiency, which reduced personnel expenses and other operating expenses in particular, as well as its continued implementation of thermal restructuring. Now that the temporary injunction involving the outage reserve at the Mellach power plants site has been lifted, VERBUND is re-evaluating all possible options with respect to that site.
The result was also influenced by non-recurring effects such as the impairment loss on the Mellach combined cycle gas turbine power plant and the reversal of provisions due to legal settlements in the Grid segment. The decrease in the water supply to well-below-average levels had a negative impact. The hydro coefficient declined to 0.94, 6.0% below the long-term average and five percentage points below the prior-year comparative. Generation from hydropower therefore fell by 1,263 GWh. Overall, VERBUND’s own generation amounted to 24,968 GWh in the first three quarters, representing a decrease of 2.9% compared with the prior-year period.
The aforementioned factors led to an increase in EBITDA of 15.0% to €727.7m. Adjusted for non-recurring effects, EBITDA decreased by 1.0% to €681.2m. The Group result rose by 258.2% to €228.7m. Adjusted for non-recurring effects, the Group result increased by 40.7% over the prior-year comparison period to €245.2m.
Outlook for 2015
Assuming an average own generation from hydropower in the fourth quarter, we expect EBITDA for financial year 2015 to be approximately €900m and the Group result to be approximately €240m. The planned payout ratio for 2015 will amount to around 50% of the Group result after adjustment for non-recurring effects.