EVN AG — Earnings Release 2005

Dec 15, 2005

News Details

Corporate | 15 December 2005 08:01

The strategy adds up: Positive development of EVN AG in 2004/05

Corporate-news processed and transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— Corporate News Part 1/2 The strategy adds up: Positive development of EVN AG in 2004/05 Highlights of the 2004/05 financial year (October 1, 2004 – September 30, 2005) – Significant increase in result despite rising costs – Increase in dividend from EUR 0.95 to EUR 1.15 (+21.1%) – Acquisition of majority stake in two Bulgarian electricity suppliers – integration process proceeding nicely – Strengthening of gas business through acquisition of majority stake in RAG Beteiligungs AG – Significant increase in use of renewable energies in Lower Austria – Expansion of project business in the water and waste sectors During the 2004/05 financial year EVN enjoyed a significant increase in all important key figures. The sales of the energy provider grew 33.3% over the previous years to EUR 1,609.5 million (EUR 1,207.3 million). EBITDA rose 12.6% to EUR 335.2 million (EUR 297.6 million). EBIT climbed 12.6% to EUR 131.0 million EUR (EUR 114.6 million). The Group net result rose to EUR 144.4 million for an increase of 22.9% over the previous year (EUR 117.4 million). The earnings per share were EUR 3.35 (EUR 3.08). 2004/05 was one of the most successful years in the history of EVN AG. The acquisition of a majority stake in two Bulgarian electricity suppliers in January 2005 contributed significantly to internationalization efforts of the EVN Group. The deal resulted in an increase in Group sales revenues in Central and East Europe from 8.2% to 24.6%. The customer base in the electricity sector thereby tripled, and the base for electricity sales to final customers doubled. The environmental business – water and waste incineration – saw both sales and earnings increases. Sales revenues and expenses The positive development of revenues in all business fields contributed to an increase in earnings of 33% for the 2004/05 financial year to EUR 1,609.5 million. The main reason is the consolidation of the two Bulgarian electricity supply companies, an increase in electricity production as well as an expansion of the project business in the water and waste incineration. These areas also compensated for the growing burden posed by high primary energy and electricity purchase costs as well as the purchase of additional CO2-emission certificates. As a result of the acquisition of the two Bulgarian electricity suppliers and their 4,046 employees, the EVN Group workforce grew 155.1% to an average of 6,654 employees. However, the increase in personnel costs was disproportionately low – 15.9% to EUR 232.3 million – due to the low level of wages in Bulgaria. Depreciation for the reporting period rose 11.6% to EUR 204.2 million (EUR 183.0 million). Scheduled depreciation grew primarily due to consolidation expansion efforts and current EVN investments. Exceptional value adjustments resulting from impairment tests during the 2004/05 financial year came to EUR 46.4 million. Operating result (EBIT) Despite these exceptional depreciation, the 2004/05 operating result grew a significant 14.3% to EUR 131.0 million. The EBIT margin of 8.1% was below the previous year’s figure of 9.5% due to the low degree of profitability of the two Bulgarian companies and the high procurement price of gas. Financial result The financial result reached EUR 55.2 million. It thus exceeded the previous year’s result of EUR of 21.3 million by EUR 33.9 million. Result before tax and net income The result before tax for the 2004/05 financial year of EVN Group rose a significant 37% to EUR 186.2 million. After taking account of taxes on profit (which rose by EUR 11.6 m) and minority interests (which rose to EUR 12.7 m), the Group net result amounted to EUR 144.4 m, which 22.9% higher than the comparable figure for the preceding year. Dividend proposal At the shareholders meeting the management board will propose a dividend of EUR 1.00 plus a bonus dividend of EUR 0.15 per share (2003/04: EUR 0.95). Bulgaria: fast-moving integration of new shareholdings At the outset of 2005, we successfully participated in the privatisation of the Bulgarian energy industry by acquiring two regional electricity suppliers. These acquisitions have not only enabled us to significantly expand our existing business in the energy sector, but they have also provided us with an opportunity to exploit the high potential of a dynamically growing market and candidate for future membership in the EU. In the period under review, the integration process initiated immediately after the acquisition has made significant progress. In the first phase, management integration was the top priority. In the meantime, within the framework of a broad-ranging follow-up process, potential room for improvement has also been identified. We have merged central administrative functions in the Bulgarian companies, in order to create an effective structure for the two firms. The result is that both corporate headquarters have been operating in line with a unified structure since August 2005. Step-by-step, we are also establishing a two-tiered regional organisation, following the example set by EVN itself. Our aim is to create competitive structures as the basis for successfully expanding our business in the Bulgarian electricity market, which will be fully liberalised as of the year 2007/08. In this way, we will be in a position to ensure a reliable and reasonably-priced supply of electricity to our customers. Strengthening our gas business The acquisition of a majority stake in RAG Beteiligungs AG, which in turn has a 75% shareholding in Rohöl-Aufsuchungs-AG (RAG), is a major step forward in strengthening our natural gas business. As Austria’s second largest oil and gas producer, RAG is not only highly successful and profitable, but also has extensive storage capacities at its disposal. With annual production levels surpassing 700 m m3, the company accounts for 40% of Austria’s domestic production of natural gas. End of Corporate News Part 1/2 End of announcement (c)DGAP 15.12.2005 —————————————————————————— WKN: 074105; ISIN: AT0000741053; Index: ATX Listed: Amtlicher Handel in Wien; Open Market in Frankfurt; Freiverkehr in Berlin-Bremen, München und Stuttgart