EVN AG — Earnings Release 2006

Feb 28, 2006

News Details

Corporate | 28 February 2006 08:18

EVN AG: Positive development of business in the first quarter of 2005/06

Corporate-news transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— 28 February 2006 Press Release Positive development of business in the first quarter of 2005/06 (October 1 – December 31, 2005) – Revenue increases in all business areas – Strong rise in earnings from EVN Group investments – Major investment increase for renewable energies – Integration of the two Bulgarian subsidiaries 2005/06 Change Q. 1 EUR m % Sales revenues 547.8 +52.8 EBITDA 128.7 +20.7 Operating result (EBIT) 87.7 +19.4 Period net result 82.2 +32.1 New Group and reporting structure With the letter to shareholders Q. 1 2005/06, EVN is reporting in the new segmental reporting structure for the first time. It has emerged as the logical consequence of the changes made in the Group structure, effective October 1, 2005. We now classify our business in three segments – Energy, Environmental Services, and Other Business – which corresponds to the system of management principles as well as the objective differentiation of our business activities, enabling a high level of transparency and optimally fulfil capital market requirements. Result Q. 1 2005/06 From October to December 2005, the business development of the EVN Group was affected by temperatures below last year’s level, an ongoing increase in wholesale prices for electricity, accelerated growth in the Austrian economy and a favourable development of the Bulgarian economy. In the 1st quarter 2005/06, total sales revenues of the EVN Group climbed to EUR 547.8 m, a rise of 52.8%, or EUR 189.4 m, above the previous year’s level. The main reasons for this significant growth in sales revenues were the initial consolidation of the two Bulgarian electricity supply companies, acquired by the EVN Group in January 2005, an increase in the energy business in Austria, as well as an expansion of the project business in the Environmental Services segment. The growing internationalisation of EVN Group is reflected by an increase of sales revenues from Central and Eastern European Countries, which increased from 6.1 % to 26.6 %. On this basis, the operating result (EBIT) of the EVN Group climbed by 19.4%, to EUR 87.7 m in the 1st quarter 2005/06. The Energy segment accounted for EUR 77.0 m of the operating result. This increase can be attributed to an enhanced electricity generation together with higher wohlesale prices for electricity. Despite an increase in distribution volumes of electricity and gas, network revenues declined in the period under review, due to the reductions in network tariffs stipulated as prescribed by the regulator. However, higher cable TV and telecom-munications sales revenues led to an overall increase in EBIT for the Networks business unit. Price increases for electricity and natural gas could not be fully compensated by sales price adjustments in electricity and gas. For this reason, EBIT in the business unit Energy Supply declined by 4.7%. Whereas the Environmental Services segment contributed EUR 9.8 m, and the Other Business segment EUR 0.9 m. There was also significant improvement in the financial result of the EVN Group in the period under review. It reached a volume of EUR 24.5 m, a total of EUR 12.4 above the level posted in the previous year. Thus the financial result more than doubled. This was primarily due to the higher contribution of Group investments, which rose by 67.6% to EUR 30.8 m. After taking account of taxes on profit and minority interests, the period net result in the 1st quarter totalled EUR 82.2 m, which was 32.1% higher than the comparable figure for the preceding year. Accordingly, earnings per share climbed by 32.1%, or EUR 0.49, to EUR 2.01. Increasing investments in biomass and wind-generated power In order to further diversify the primary energy mix, EVN has also intensified its investments in the field of renewable energy sources. In the year 2006 alone, EVN will invest a total of EUR 65 m in constructing six biomass-fired district heating as well as six biomassfired local heating stations. EVN is also considerably expanding its current capacity of wind-generated electricity. In the period between the beginning of 2005 and the middle of 2006, the windpower capacity will more than triple from 30 MW to 110 MW. New water projects for Lithuania and Cyprus Our Environmental Services segment began the new financial year on a positive note, winning the contract for two projects in Lithuania and Cyprus. By the end of 2008, our 100% subsidiary WTE will complete the central wastewater purification facility of the city of Kaunas, Lithuania, with a population equivalent of 370,000. In Cyprus, WTE was awarded the job of constructing a wastewater treatment facility for the capital city of Nicosia for a population equivilant of about 100,000. Further integration and optimisation in Bulgaria In the 1st quarter 2005/06, EVN made considerable progress in integrating the two regional Bulgarian electricity supply companies ERP Plovdiv and ERP Stara Zagora, of which we acquired a majority holding in January 2005. In addition to harmonising their operations with other companies within the EVN Group, the Bulgarian subsidiaries are being prepared to meet the challenges posed by the planned liberalisation of the energy sector. A modern, customer-oriented sales organisation modelled after EVN in Lower Austria is also being established. As a consequence of measures taken to improve customer service and competitiveness, the number of employees working for ERP Plovdiv and ERP Stara Zagora will be reduced by 1,000 by the end of 2007. This decline in the work force will take place on the basis of a natural fluctuation as well as a voluntary social support program. In the current financial year, the business results of the Bulgarian subsidiaries will be strongly shaped by the necessary restructuring. However, EVN is laying the groundwork for a positive business development in the years to come. Outlook EVN is expected to continue its very dynamic development within the framework of a more favourable outlook in the overall business environment. Due to the strong seasonal nature of the energy sector, EVN’s solid results in the 1st quarter can not simply be taken as a valid benchmark for the further development of business during the 2005/06 financial year. According to Burkhard Hofer, Speaker of the EVN Executive Board, “Due to various factors, we anticipate a significant increase in Group sales revenues and operating result. These include the first-time consolidation of the Bulgarian subsidiaries for an entire year, the high level of electricity generation in our own power plants, and further growth in the water and waste incineration areas. Due to the positive development of EVN Group investments, the financial result of the Group is also expected to surpass last year’s level. All in all, we anticipate an improvement once again in the Group net result.” EVN’s Letter to Shareholders for the 1st quarter 2005/06 can be downloaded from www.investor.evn.at (c)DGAP 28.02.2006 ————————————————————————— language: English emitter: EVN AG EVN Platz 2344 Maria Enzersdorf Österreich phone: +43-2236-200-12294 fax: +43-2236-200-82294 email: info@evn.at WWW: www.evn.at ISIN: AT0000741053 WKN: 074105 indexes: ATX stockmarkets: Amtlicher Markt in Wiener Börse; Freiverkehr in Berlin-Bremen, München, Stuttgart; Open Market in Frankfurt End of News DGAP News-Service —————————————————————————