DGAP-News: EVN AG: Business performance in the 2012/13

DGAP-News: EVN AG / Key word(s): Final Results EVN AG: Business performance in the 2012/13 financial year 12.12.2013 / 08:00 --------------------------------------------------------------------- (1 October 2012 - 30 September 2013) Highlights * Operating results close to prior-year's level * Group net profit down 41.2% due to negative effects in financial results * Strong balance sheet with equity ratio of 43.2 % * Investments into security of supply * Increase in generation capacity (100th windpower plant in Lower Austria, hydropower plants in Ashta, Albania, and Macedonia) * 785 MW reserve capacity assigned for Southern Germany * Opening of wastewater purification plants in Warsaw, Poland, and expansion in Å entjernej, Slovenia * Announcement of a reduction in electricity and natural gas end customer prices by 3.6% and launch of an energy efficiency campaign Key figures Revenue: -3.2% to EUR 2,755.0m EBITDA: -3.6% to EUR 457.6m Results from operating activities (EBIT): -2.1% to EUR 218.5m Group net profit: -41.2% to EUR 114.7m Energy sector environment The development of primary energy prices differed during the 2012/13 financial year. The average price for crude oil in euros fell due to high stock and low demand because of the general economic weakness. Similar reasons led to a decline in coal prices. In contrast, average exchange prices for natural gas rose by more than 10%, while the prices for CO2 certificates dropped further. The international energy markets were characterised by a further drop in both spot market and forward prices for base load and peak load electricity in 2012/13. The main factor for this development was an increase in electricity generation from renewable energy sources and the resulting surplus production capacity, which led to extremely volatile price developments. In the field of thermal generation spreads continued to be at low or even negative levels. In August 2013, EVN together with its partners of EnergieAllianz, announced the start of an energy efficiency campaign that includes, among others, support for the purchase of energy-efficient equipment and energy services. The start of this campaign also included the announcement of an average reduction of 3.6% in electricity and natural gas prices for households and small business customers as of 1 October 2013. Revenue decline with different development of prices The EVN Group generated revenue of EUR 2,755.0m in 2012/13, which represents a decline of EUR 91.5m, or 3.2%, compared with the previous year. In the energy business, decreasing electricity prices had a negative effect in Austria. This was contrasted by higher revenue in Macedonia following price increases in the prior year. Revenue in the environmental business was substantially lower year-on-year due to a drop in project volumes. The revenue generated outside Austria fell by EUR 45.7m, or 3.8%, to EUR 1,152.1m. This represents a decline in the share of Group revenue from 42.1% in the previous year to 41.8%. EBITDA and EBIT close to prior-year's level EBITDA decreased by 3.6% to EUR 457.6m. Lower operating expenses for electricity purchases and primary energy, which were down 1.1% to EUR 1,612.6m and for third-party services and other materials and ser-vices, which were down 15.5% to EUR 295.8m, compensated for the lower revenue that has been mentioned above. The decline in electricity purchases and primary energy expenses resulted primarily from a decrease in the volumes of electricity purchased in South Eastern Europe due to the milder winter and the end of fixed tariffs for renewable electricity in Austria. The development of third-party services and other materials and services is attributable chiefly to a year-on-year decline in the volume of implemented projects in the environmental business. Results from operating activities (EBIT) declined 2.1% year-on-year to EUR 218.5m. Financial results exerted pressure on Group net profit EVN's Group net profit was burdened by the financial results. This led to a decline of 41.2% down to EUR 114.7m. Several factors were responsible for the EUR 74.6m reduction in financial results to EUR -38.1m. The negative spread between natural gas procurement and sales prices and offtake commitments of EconGas resulted in a negative contribution of EUR 19.7m for EVN. WEEV Beteiligungs GmbH, which holds the Verbund shares purchased during the 2010 capital increase, recorded an impairment loss of EUR 29.6m on the market valuation of these shares. The sale of the 50% stake in Devoll Hydropower ShA to the previous partner Statkraft A.S. had a negative effect of EUR 27.6m on earnings. Shkodra Region Beteiligungsholding GmbH, which holds the investment in the Ashta hydropower plant in Albania, recorded a negative earnings contribution of EUR 20.4m that was also reflected in financial results. Positive cash flow development and stable balance sheet structure Gross cash flow rose by EUR 73.3m, or 15.3%, to EUR 553.6m in the financial year 2012/13, in spite of the decline in profit before tax. This development was supported, above all, by non-cash effects related to the share of profit from equity accounted investees and from changes in non-current provisions. Combined with a lower year-on-year increase in working capital as of 30 September 2013, cash flow from operating activities increased by 21.8% to EUR 561.7m. Net debt decreased by EUR 141.4m and totalled EUR 1,562.3m as of 30 September 2013. Thus, gearing fell from 56.5% to 50.9%. Equity rose compared to the previous year by EUR 52.8m to EUR 3,066.5m; equity ratio was close to the prior year level at 43.2% (previous year: 43.9%) Focus on security of supply, expansion of renewable energy Investments focused on security of supply. More than one-half of the investments in 2012/13 were directed to the expansion and modernising of Austrian network Infrastructure. Abroad the focus remained on the improvement of grid efficiency. Generation capacities could be increased in the reporting period. At a site near Deutsch-Wagram, Lower Austria, EVN started operations of its 100th wind turbine. A further windpark in Prellenkirchen is currently under construction. EVN will then have a total of 14 windparks with a combined capacity of 213 MW in operation, which can supply more than 100,000 households with environmentally friendly electricity. In Albania, the hydropower plant Ashta was put into operations, representing a capacity of 26 MW for EVN. In Macedonia, EVN took over seven revitalised small-scaled hydropower plants, which were leased to third parties up to January 2013. EVN now operates 11 small-scaled hydropower plants with a total capacity of 48 MW. Over the next three winter half-years, EVN will provide 785 MW of reserve capacity each year through its gas-fired power plants TheiÃ? and Korneuburg for southern Germany. In South Eastern Europe, the regulatory authorities reduced end customer prices for electricity by an average of 3.0% in Macedonia and by an average of 4.2% in Bulgaria within the context of the annual price adjust-ments. The new mechanism to calculate compensation for the added costs of renewable electricity in Bulgaria is not expected to result in additional costs for EVN. The resulting claims are being pursued in arbitration proceedings initiated with the International Centre for the Settlement of Investment Disputes, an institution created by the World Bank. EVN and its consortium partners opened one of Europe's largest wastewater purification plants in Warsaw. In July 2013, EVN received a further contract in Poland. In Å entjernej, Slovenia, the existing wastewater purification plant was enlarged and modernised. Negotiations are currently in progress with the city of Moscow over the projects for the the waste incineration plant and the sodium hypochlorite plant. Outlook The European energy market is currently undergoing a far-reaching transformation. The steadily increasing, but volatile generation of energy, above all from windpower and photovoltaic equipment, is shifting the issue of supply security in connection with a new market design into the centre of discussion. Against this backdrop, EVN's strategy is directed to the consolidation of existing business activities and to the security of supply, in particular. The prior period effects that reduced financial results in 2012/13 are non-recurring, and Group net profit for 2013/14 should therefore exceed the results for 2012/13. The current distortions in the energy markets will, nonetheless, prevent a return to the level recorded in recent years. Group net profit could also be significantly influenced by the development of the arbitration proceedings with the Bulgarian government and progress on the projects in Moscow. The EVN Full report 2012/13 is available at www.investor.evn.at. End of Corporate News --------------------------------------------------------------------- 12.12.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: EVN AG EVN Platz 2344 Maria Enzersdorf Austria Phone: +43-2236-200-12294 Fax: +43-2236-200-82294 E-mail: info@evn.at Internet: www.evn.at ISIN: AT0000741053 WKN: 074105 Indices: ATX Listed: Foreign Exchange(s) Wien (Amtlicher Handel / Official Market) End of News DGAP News-Service --------------------------------------------------------------------- 244368 12.12.2013