EVN AG — Earnings Release 2006

Dec 12, 2006

News Details

Corporate | 12 December 2006 08:00

EVN AG: EVN underlines positive results in 2005/06

Corporate News transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— 12.12.2006 Press Information Creating value – exploiting strengths: EVN underlines positive results in 2005/06 (October 1, 2005 – September 30, 2006) – Significant improvement in EVN Group performance despite high cost pressure and declining network and energy supply revenues – Perceptible improvement in the financial results due to the positive development and one-off effects of EVN Group investments – Acquisition of a majority shareholding in the Macedonian national electricity distribution company AD Elektrostopanstvo na Makedonija (ESM AD) – Swift integration of the new subsidiaries in Bulgaria and Macedonia – Expansion of the project business in the water, wastewater and waste incineration business – Ground-breaking ceremony for coal-fired power plant project in Duisburg-Walsum, Germany 2005/06 Change EUR m % Total revenue 2,071.6 +28.7 EBITDA 397.4 +18.6 EBIT 184.4 +40.7 Group net profit 221.9 +53.7 For the EVN Group, the 2005/06 financial year was a period of growth and transformation, primarily as a consequence of the acquisition of a majority shareholding in Macedonia’s national electricity distribution company ESM AD and the ongoing swift integration of the Bulgarian subsidiaries. Compared to the previous year, revenue increased by 28.7%, to EUR 2,071.6m, EBIT rose by 40.7%, to EUR 184.4m, and the Group net profit climbed by 53.7%, to EUR 221.9m. Earnings per share amounted to EUR 5.43 (preceding year: EUR 3.53). The EVN Group took a major step forward in internationalising its business operations by acquiring a majority shareholding in the Macedonian national electricity distribution company in April 2006 and two Bulgarian electricity distribution companies in January 2005. As a result, external revenue in Central and Eastern Europe and in South East Europe rose to 33.5% of total Group revenue. Due to the acquisition of the Bulgarian electricity distribution companies, the customer base of the EVN Group in the electricity segment rose by 1.5 million. The latest acquisition in Macedonia increased the number of electricity customers of the EVN Group by a further 700,000. Electricity production, as well as the environmental services business in the fields of water, wastewater and waste incineration expanded dynamically, and made considerable contribution to total Group revenue and income. Significant rise in revenue In the 2005/06 financial year, total revenue of the EVN Group climbed to EUR 2,071.6m, a rise of EUR 462.0m above the previous year’s level. On the one hand, the significant improvement in revenue can be attributed to the enlargement in the consolidation range by the first-time integration of the new Macedonian subsidiary ESM AD for two quarters in the consolidated financial statements of the EVN Group during the period under review, and the full-year consolidation of the two Bulgarian subsidiaries. Furthermore, the increase in revenue is primarily the result of the expansion of the project business in the field of environmental services, particularly the construction of a drinking water facility and a waste incineration plant for the city of Moscow, as well as strong growth in EVN’s energy business. Ongoing high energy prices In the 2005/06 financial year, the high market prices for primary energy and electricity purchases continued to place a considerable burden on EVN results. Moreover, the expenditure required to acquire additional CO2 emission certificates also had a negative impact. The item ‘Electricity purchases and primary energy expenses’ rose by 38.9%, to EUR 1,042.1m. EBITDA and EBIT clearly up on the previous year’s level In spite of the unfavourable energy purchasing price trends, and declining network revenues, EBITDA rose by 18.6%, to EUR 397.4m. The results from operating activities (EBIT) of the EVN Group also improved considerably compared to the preceding year, rising by 40.7%, to EUR 184.4m. This was mainly due to the high level of electricity production, the positive contributions of the two Bulgarian electricity supply companies, as well as the positive development of the water and waste incineration business areas. Financial results more than doubled There was a significant improvement of the financial results of the EVN Group during the 2005/06 financial year in comparison to the preceding year. This can be primarily attributed to the higher income from investments in the consolidated financial statements, which more than doubled during the period under review, increasing by EUR 75.6m to EUR 147.8m. In addition to an increase in the contribution of Rohöl-Aufsuchungs AG and a considerable increase in the results posted by EconGas, this rise was to a large extent due to one-off effects arising from the first-time consolidation of BEWAG and BEGAS with their proportional results according to IFRS as at September 30, 2006. The main reason for the improved income from other investments was the higher dividends distributed by Verbundgesellschaft, and a further one-off effect derived from the sale of EVN’s shareholding in Energie AG Oberösterreich. Considerable improvement in the profit before income tax The profit before income tax of the EVN Group rose by 63.7%, to EUR 304.9m during the 2005/06 financial year. This increase was primarily due to the rise in the tax-free income from EVN Group investments. For this reason, income tax expense was up by only 30.7%, to EUR 38.1m. After taking account of minority interest, the Group net profit amounted to EUR 221.9m, an increase of 53.7%, or EUR 77.5m, in comparison to the preceding year. Dividend proposal EVN’s dividend policy is directed towards sustainable, continuous development. Accordingly, EVN seeks an ongoing rise in the dividend payout ratio. On the basis of the development of the Group net profit, the Executive Board proposes to the Annual General Meeting that the dividend for the 2005/06 financial year be further raised by 21.7%, to EUR 1.40 (EUR 1.20 plus a EUR 0.20 bonus dividend). Swift integration of the subsidiaries in Bulgaria and Macedonia EVN decisively expanded its foothold in South East Europe in the 2005/06 financial year, due to its acquisition of a majority stake in Macedonia’s national electricity distribution company ESM AD, which provides energy to the entire Republic of Macedonia. Whereas the integration process of the Macedonian subsidiary is at an early stage, important milestones have already been achieved in Bulgaria, such as the exploitation of synergies through simplifying management structures, setting up customer centres in line with EVN’s Lower Austrian customer relations approach, and preparing the Bulgarian companies for the upcoming market liberalisation. Expansion of the project business EVN achieved the preliminary completion of an important large-scale project via its 100% owned subsidiary WTE, transferring a new drinking water facility to the city of Moscow on schedule. The investment volume of this project, funded by project financing, amounted to EUR 190.0m. The official start-up of the entire installation took place in November 2006. Drinking water will be supplied to one million inhabitants of the Russian capital city as of the end of 2006. In March 2006, WTE won an international tender to construct and operate a combined cycle heat and power plant. The project involves total investments of EUR 21.5m. Operating in accordance with the ‘waste-to-energy’ principle, the power plant will generate electricity from biogas supplied by a water purification facility of the municipal wastewater utility. Construction of a coal-fired power plant in Duisburg-Walsum, Germany Formal approval was granted to begin construction of a new coal-fired power plant with an overall capacity of 790 MW, which EVN and STEAG will jointly build in Duisburg. The total investment volume of the project, in which EVN has a 49% stake, amounts to EUR 820m. The ground-breaking ceremony took place on November 20, 2006. The new power plant is expected to commence operations in 2010. Outlook According to Burkhard Hofer, Speaker of the Executive Board, ‘EVN’s business results have been quite impressive in recent years. It is obvious that such growth rates can not be repeated every single year, especially considering the difficult business environment in which the energy industry operates. However, developments in the last few years have enabled us to demonstrate that our growth course is taking us in the right direction. Our aim is to achieve a leading position as an energy and environmental services provider in selected Central and Eastern European markets on a long-term, sustainable basis, with our foothold in Lower Austria serving as the starting point for our business activities’. The complete EVN Annual Report 2005/06 can be downloaded at: www.investor.evn.at EVN in figures Key energy business indicators 2005/06 2004/05 Change Nominal % Electricity generation (GWh) 4,556 4,484 72 1.6 Thereof thermal power 3,517 3,498 19 0.5 Thereof renewable energy 1,039 986 53 5.4 Distribution volumes Electricity (GWh) 16,495 12,076 4,418 36.6 Thereof Austria 7,279 6,932 348 5.0 Thereof Bulgaria 7,229 5,145 2,084 40.5 Thereof Macedonia 1,987 – 1,987 – Gas (m m3)1) 1,874 1,818 56 3.1 Supply volumes to end customers Electricity (GWh) 15,641 11,342 4,299 37.9 Thereof Austria 6,426 6,197 228 3.7 Thereof Bulgaria 7,229 5,145 2,084 40.5 Thereof Macedonia 1,987 – 1,987 – Gas (m m3)2) 748 707 42 5.9 Heating (GWh) 1,067 1,033 34 3.3 1) Incl. network sales to EVN power stations. 2) Incl. gas wholesales amounting to 66m m3 (previous year: 71m m3). Income statement 2005/06 2004/05 change EURm EURm EURm % Energy revenue 1,761.7 1,370.2 391.4 28.6 Environmental Services revenue 290.1 212.9 77.2 36.2 Strategic Investments and Other Business revenue 19.8 26.4 -6.6 -24.8 Total revenue 2,071.6 1,609.5 462.0 28.7 Change in work in progress and own work capitalised 13.6 7.7 5.9 76.3 Other operating income 40.7 41.5 -0.8 -1.8 Electricity purchases and primary energy expenses -1,042.1 -750.3 -291.8 -38.9 Other materials and services -316.1 -261.3 -54.9 -21.0 Personnel expenses -263.6 -232.3 -31.3 -13.5 Other operating expenses -106.6 -79.7 -26.9 -33.8 EBITDA 397.4 335.2 62.2 18.6 Depreciation and amortisation -213.0 -204.2 -8.9 -4.3 Results from operating activities (EBIT) 184.4 131.0 53.4 40.7 Financial results 120.5 55.2 65.3 – Profit before income tax 304.9 186.2 118.7 63.7 Income tax expense -38.1 -29.2 -9.0 -30.7 Net profit for the period 266.8 157.0 109.7 69.9 Thereof Minority interest 44.9 12.7 32.2 – Group net profit 221.9 144.4 77.5 53.7 EUR EUR EUR % Earnings per share 5.43 3.53 1.90 53.7 (c)DGAP 12.12.2006 ————————————————————————— Language: English Issuer: EVN AG EVN Platz 2344 Maria Enzersdorf Österreich Phone: +43-2236-200-12294 Fax: +43-2236-200-82294 E-mail: info@evn.at WWW: www.evn.at ISIN: AT0000741053 WKN: 074105 Indices: ATX Listed: Amtlicher Markt in Wien; Freiverkehr in Berlin-Bremen, Stuttgart, München; Open Market in Frankfurt End of News DGAP News-Service —————————————————————————