Quarter 3/2017 saw a recovery in prices in the energy market. EEX wholesale power prices have climbed in recent months, due in particular to increases in hard coal and CO2 prices. China’s higher coal imports have led to a rise in global hard coal prices and the reform of the ETS currently under discussion has raised CO2 price expectations.
Despite the improvement in the general environment, earnings were down in quarters 1–3/2017. This was due in particular to much weaker earnings in the Grid segment and below-average water supply. At 0.94, the hydro coefficient representing the water supply in rivers was down 7 percentage points year-on-year and 6% below the long-term average. As a result, generation from hydropower decreased by 1,360 GWh. On the whole, VERBUND’s own generation was 1.2% lower than in the prior-year period at 24,785 GWh. Even the sharp increase in thermal generation and the higher generation from new sources of renewable energy were unable to compensate for this. Although contribution margins generated in thermal operations from the use of the Mellach combined cycle gas turbine power plant for congestion management were higher, EBITDA was nevertheless lower overall than in the previous year because prior-year EBITDA had been impacted by other operating income from the settlement of various outstanding issues between VERBUND and EconGas GmbH. Positive effects on earnings performance were provided by the substantially higher contributions from flexible products as well as the measures taken to restructure thermal operations and the measures implemented under the programmes to reduce costs and increase efficiency. EBITDA therefore decreased by 18.1%, from €809.7m to €663.5m. The Group result was down by 20.7% on the prior-year period to €269.5m. Adjusted for non-recurring effects, EBITDA declined by a more moderate 5.0%, from €698.4m to €663.5m, and the adjusted Group result by 8.8%, from €276.4m to €252.1m.
Outlook for 2017
Assuming an average supply of both water and wind in quarter 4/2017, VERBUND continues to expect EBITDA of approximately €830m for full-year 2017. Due to the non-recurring effects recognised in its thermal operations in quarter 3/2017, the Group result for 2017 will be approximately €320m. The planned payout ratio for 2017 will be 40–45% of the Group result of approximately €300m after adjustment for non-recurring effects.