DGAP-News: EVN AG: Business development in the first half

DGAP-News: EVN AG / Key word(s): Half Year Results EVN AG: Business development in the first half year of 2013/14 28.05.2014 / 08:00 --------------------------------------------------------------------- Business development in the first half year of 2013/14 (1 October 2013 - 31 March 2014) Highlights * Results from operating activities negatively influenced by price and quantity effects in the energy business and declines in the environmental services business * Financial results increased to EUR 53.4m * Improvement in Group net profit by 44.1% * Net cash flow from operating activities 40.7% above the previous year * Outlook 2013/14: Group net profit is expected to be higher than in the 2012/13 financial year, however, no return to recent years' levels Key figures Revenue: -10.3% to EUR 1,481.5m EBITDA: -8.3% to EUR 303.0m Results from operating activities (EBIT): -12.8% to EUR 184.9m Group net profit: +44.1% to EUR 189.5m Cash flow from operating activities: +40.7% to EUR 219.3m Energy sector environment The first half of 2013/14 brought temperatures that were substantially higher than the previous year in all EVN core markets. Austria recorded a decline in the heating degree total of 17.8 percentage points; temperatures were not only below the previous year, but also below the long-term average. Also in Bulgaria and Macedonia winter was milder than in the previous year. The forward and spot market prices for base load and peak load electricity were at low levels during the reporting period. This decline resulted, above all, from the on-going expansion of renewable energy generation capacity in Austria and Germany as well as lower prices for coal and CO2 emission certificates. Decrease in results from operating activities; increase in Group net profit The EVN Group generated revenue of EUR 1,481.5m in the first half of 2013/14, for a decline of 10.3%, below the comparable prior year period. These results were influenced by a reduction in the energy business based on lower electricity prices in the trading and end customer business as well as a drop in sales volumes as a result of the mild weather. The environmental services business also recorded decreased processed orders of the international project business. Other operating income fell by 14.6%, to EUR 41.5m. The cost of electricity purchases from third parties and primary energy expenses was 12.1%, lower at EUR 871.4m. The revenue decline in the international environmental services business led to a decrease in third party services and other materials, which fell by 23.9%, to EUR 104.7m. EBITDA declined 8.3%, to EUR 303.0m and EBIT 12.8% to EUR 184.9m. Financial results improved by EUR 70.5m to EUR 53.4m due to absence of aperiodic prior period effects. Group net profit equalled EUR 189.5m for the first half of 2013/14. This represents a year-on-year increase of 44.1%. Positive development of cash flow from operating activities and solid balance sheet structure Gross cash flow was 23.0%, lower at EUR 292.1m, despite the increase in profit before income tax, due to a decline in non-cash earnings components from equity accounted investees and non-current provisions. Cash flow from operating activities rose by 40.7%, to EUR 219.3m, based on an increase in trade payables and other liabilities. Equity rose by EUR 42.4m, or 1.4%, to EUR 3,108.9m, despite the payment of the dividend approved by the 85th Annual General Meeting on 16 January 2014. The equity ratio equalled 43.2% as of 31 March 2014 (30 September 2013: 43.2%). Net debt declined EUR 140.6m below the level on 30 September 2013 to EUR 1,421.7m, and gearing was reduced from 50.9% to 45.7%. Developments in the energy and project business EVN's primary objective is to safeguard supply security for its customers. Therefore, investments will be concentrated on the expansion and development of network infrastructure over the coming years. These investments are also required to service the smooth transport of the energy generated by the rising number of windpower plants in the network region. In the first half year of 2013/14 about half of total investments were spent in the Network Infrastructure Austria Segment. The further development of renewable energy sources was supported by the start of construction on the Prottes-Ollersdorf wind park during the reporting period. This park, with its 12 wind turbines, will have an installed capacity of approximately 37 MW and is scheduled to be commissioned in spring 2015. A photovoltaic plant was also opened in Schönkirchen during May 2014 and offers EVN's customers an opportunity for investment. This plant has roughly 4,000 panels with a total output of approximately 1,000 kWpeak. In Bulgaria, as published in an ad-hoc announcement on 19 March 2014, EVN is confronted with the unlawfully threatened suspension of the license for its electricity supply subsidiary EVN Bulgaria Elektro-snabdiavane EAD. EVN will protect its rights as best as possible in the - in its opinion - unjustified proceedings in front of any available (arbitration) courts and bodies. The arbitration proceedings started at the World Bank's International Centre for the Settlement of Investment Disputes last year will be pursued actively. In the environmental services business, EVN decided to draw a guarantee issued by the Federal Republic of Germany for foreign direct investment in connection with the project sodium hypochlorite plant, since the city of Moscow is not prepared to stand by the permit granted for the commissioning of the and to meet its payment obligations. The building permit for the waste incineration plant has still not been issued by the city of Moscow. In the area of water supplies, EVN took over the management and operation of facilities in the municipality of Göllersdorf as of 1 January 2014. This raised the number of end customers by 3,450 to over 87,000 residents. EVN is the drinking water supplier for over 500,000 residents in 677 partly or fully serviced cadastral municipalities in Lower Austria. Outlook We confirm our outlook for the 2013/14 financial year. The absence of prior period effects and the resulting negative influence on financial results for 2012/13 should support an increase in Group net profit over the 2012/13 level. The current distortions on 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 proceedings with the Bulgarian government and progress on the projects in Moscow. For the complete Letter to Shareholders for the first half year of 2013/14 see www.investor.evn.at. End of Corporate News --------------------------------------------------------------------- 28.05.2014 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 --------------------------------------------------------------------- 270791 28.05.2014