DGAP-News: EVN AG: Business development in the 2014/15

DGAP-News: EVN AG / Key word(s): Final Results EVN AG: Business development in the 2014/15 financial year 10.12.2015 / 08:00 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Business development in the 2014/15 financial year (1 October 2014 - 30 September 2015) Highlights * Successful sale of the sodium hypochlorite plant to the water supply and wastewater disposal company of the city of Moscow * Increase in electricity generation by 11.1% - Rise in renewable energy production due to the commissioning of the 37 MW windpark Prottes-Ollersdorf as well as higher wind and water flows - Substantial rise in the use of the natural gas-fired power plants to support network stability - First full-year operation of the Duisburg-Walsum power plant * Positive earnings contribution from the energy business in South East Europe * Increase in operating results and Group net result * Reduction of net debt due to strong operating cash flow * Dividend proposal to the 87th Annual General Meeting in the amount of EUR 0.42 per share * Reduction of energy prices for electricity and natural gas by an average of 5% each for household customers within the framework of EnergieAllianz Austria as of 1 October 2015. Key figures * Revenue: +8.2% to EUR 2,135.8m * EBITDA: EUR +399.2m to EUR 583.2m * Results from operating activities (EBIT): EUR +609.6m to EUR 268.2m * Financial result: EUR -28.4m to EUR -60.3m * Group net result: EUR +447.1m to EUR 148.1m * Net debt: EUR 1,230.9m (30.09.2014: EUR 1,622.4m) Energy sector environment The average temperatures in Austria during the reporting period were nearly unchanged compared with the previous year, which was characterised by an unusually mild winter. In contrast, substantially lower temperatures were recorded in South East Europe. The prices for primary energy carriers such as crude oil, natural gas and hard coal continued to decline in 2014/15. The reporting year also brought a further decline in forward prices on the European electricity exchanges, with a year-on-year minus of 3.8% to EUR 34.9 per MWh for base load and a minus of 5.4% to EUR 43.8 per MWh for peak load. Increase in EBITDA, EBIT and Group net result Revenue recorded by the EVN Group increased by 8.2% to EUR 2,135.8m in 2014/15. This growth was supported by the increase in electricity generation as well as by the expansion of the company's natural gas trading activities. Positive impulses were also provided by the investments in South East Europe. The absence of last year's negative one-off effects and the weather-related higher sales volumes made an important contribution to the improvement in revenue. Other operating income increased by 52.3% to EUR 108.4m. This strong improvement reflected the increased work in process in the network business as well as the sale of the shares in the property company that holds the sodium hypochlorite plant. Taking into account higher cost of electricity purchases from third parties and primary energy expenses due to the first full year of operations in the Duisburg-Walsum power plant, EVN recorded an EBITDA of EUR 583.2m for 2014/15, an increase of EUR 399.2m over the previous year. Depreciation and amortisation rose by 1.7% to EUR 260.3m, above all due to the ongoing investments in the networks and the expansion of renewable production capacity. Including the results of impairment tests, the results from operating activities (EBIT) amounted to EUR 268.2m and exceeded the previous year by EUR 609.6m. Financial results amounted to EUR -60.3m and were EUR 28.4m lower than the previous year. This change reflected a decline in the dividend from Verbund AG for the 2014 financial year and the termination of the hedge for the financing of the sold sodium hypochlorite plant in Moscow as well as the costs for the related investment guarantee issued by the Federal Republic of Germany. In total, profit before income tax for the 2014/15 financial year equalled EUR 207.9m (previous year: EUR -373.3m). Group net profit rose to EUR 148.1m for the 2014/15 financial year (previous year: EUR -299.0m). The Executive Board will therefore recommend the distribution of a stable dividend of EUR 0.42 per share for the 2014/15 financial year to the 87th Annual General Meeting (previous year: EUR 0.42). This corresponds to a dividend yield of 4.3% (previous year: 4.1%) based on the share price of EVN AG on 30 September 2015 (EUR 9.854). Reduction of net debt due to strong operating cash flow The strong cash flow from operating activities allowed EVN to reduce net debt by EUR 391.5m to EUR 1,230.9m during the reporting year. The equity ratio rose to 39.8% (previous year: 38.5%), and the gearing ratio decreased from 61.6% to 47.5%. Developments in the energy and environmental services business Energy business EVN successfully continued its investment programme during the report period. The programme was already started in 2013/14 and has a total volume of EUR 1bn which will be invested over a period of four years. The focus will be placed on network investments to transport the growing feed-in volumes from renewable energy generation and to protect network stability. Another focus of the investment strategy is set on the expansion of generation capacities from renewable energy sources. The commissioning of the Prottes-Ollersdorf windpark gives EVN a current wind generation capacity of 250 MW. EVN plans to raise its installed windpower capacity to 300 MW over the next few years. In the medium term a generation mix consisting of both thermal and renewable production capacities is required to protect supply security. Plans therefore call for the Dürnrohr coal-fired power plant to remain in operation up to the end of its technical useful life to support the system conversion to renewable energy and to balance fluctuations in the production of renewable energy. As in the past few years, the Theiss and Korneuburg power plants also provided reserve capacity for southern Germany during the winter of 2014/15. EVN's power plants were called on more than 80 times during 2014/15 to support network stability in Austria and Germany. A contract was signed which covers the allocation of 775 MW in reserve capacity for southern Germany during the winter half-year 2016/17. The power plants will therefore supply these services up to and including the winter half-year 2017/18. EVN's sales company again passed on the benefits from lower energy procurement costs in the form of a price reduction. The energy prices for electricity and natural gas were reduced by an average of 5% each for household customers within the framework of EnergieAllianz Austria as of 1 October 2015. Environmental services business Investments in drinking water supplies for Lower Austria are focused on supplying new communities with drinking water and improving the quality and supply security of drinking water for existing customers. EVN made decisive progress in this area during the reporting year with the commissioning of two natural filter plants which reduce the hardness of the water by natural means. In the international project business, EVN worked on the realisation of eight projects in the Czech Republic, Poland, Montenegro, Romania and Cyprus during 2014/15. Most of these projects involve EVN's services as the general contractor with responsibility for the planning and construction of the plant, while the financing is arranged by the customer. Outlook Under the assumption of average conditions in the energy environment, the Group net result for 2015/16 is expected to remain largely stable. The factors that could significantly influence this net result include the regulatory background, developments in the proceedings related to claims from the tariff decisions in Bulgaria and the Duisburg-Walsum power plant as well as the progress on activities in Moscow. For the complete Full Report 2014/15 see www.investor.evn.at. --------------------------------------------------------------------------- 10.12.2015 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP 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 --------------------------------------------------------------------------- 422511 10.12.2015