EVN AG — Earnings Release 2008

May 29, 2008

News Details

Corporate | 29 May 2008 08:00

EVN AG: Development of business in the first half-year of 2007/08

EVN AG / Half Year Results/Half Year Results

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Development of business in the first half-year of 2007/08
(October 1, 2007 – March 31, 2008)

Weather-related increase in Energy segment sales volumes and revenue
Acquisition of a 49% shareholding in the district heating company
Fernwärme St. Pölten GmbH
Foreign expansion of Rohöl-Aufsuchungs AG
Contract to construct a sodium hypochlorite production facility for
the City of Moscow
Capital increase from the company’s non-appropriated capital reserves,
stock split by a ratio of 4 for 1 effective April 17, 2008

                                    2007/08 
                                       HY.1     Change 
                                       EUR m     in %

Revenue 1,365.0 + 9.0
EBITDA 262.0 + 2.3
Results from operating activities (EBIT) 170.6 - 0.7
Group net profit 187.4 - 0.8

The business environment in the energy sector in the period
October 2007 – March 2008 was characterised by lower temperatures compared
to the comparison period of the previous year, increasing wholesale
electricity and primary energy prices, strong economic growth in Austria,
as well as a continuation of the very dynamic economic expansion in South
East Europe.

In the 1st half of the 2007/08 financial year, EVN increased its total
revenue by 9.0%, to EUR 1,365.0m. The colder temperatures led to a revenue
increase in the Energy segment, whereas revenue in the Environmental
Services segment declined, as expected. The results from operating
activities (EBIT) amounted to EUR 170.6m, or 0.7% below the previous year’s
level, the Group net profit fell 0.8%, to EUR 187.4m.

Considerable progress within the framework of the energy concept for the
Lower Austrian Central Region
On January 11, 2008 Europe’s largest district heat store in Theiß was put
into operation, moreover the district heating project in cooperation with
the Lower Austrian capital of St. Pölten was successfully continued.
Following the formal approval granted by Austria’s antitrust authorities,
the district heating operations of the City of St. Pölten were spun off
from the municipal utility to a newly-established company, in which EVN
acquired a 49% shareholding, and which was included at equity as of the 2nd
quarter of 2007/08. In April 2008, we opened the biomass pilot plant in
Dürnrohr, which is designed to increase the share of energy generated by
renewable energy sources, and further diversify EVN’s energy mix. The
ground-breaking ceremony for constructing the district heating pipeline
from Dürnrohr to St. Pölten took place on May 20, 2008.

Foreign expansion of Rohöl-Aufsuchungs AG
Rohöl-Aufsuchungs AG, Vienna, in which EVN has a majority shareholding of
50.03%, is expanding abroad and will cooperate with the Ukrainian
state-owned enterprises 'Crimgeologiya' and 'Transeuro Energy' within the
context of a joint venture to exploit natural gas fields in the Crimea. The
joint development of four gas fields has already been contractually
concluded. Further exploration projects are being negotiated.

New projects in Environmental Services segment
In the 2nd quarter 2007/08, WTE was awarded a contract for two construction
projects in Moscow. On the one hand, a sodium hypochlorite production
facility will be built, designed to replace the chlorine gas used in
drinking water purification. The project, with a total investment volume of
EUR 178m, is being implemented within the context of a BOOT model,
including operation of the plant over a period of ten years. On the other
hand, WTE will also construct a second combined cycle heat and power plant,
including an integrated sludge dewatering facility. Biogas derived from the
sludge of the wastewater treatment facility, one of the largest in the
world, will provide the main energy source for the power plant located in
Ljuberzy south of Moscow. WTE will be responsible for operating the biogas
plant for a period of 15 years.

1st Half-Year 2007/08: Increase in Energy segment sales volumes and revenue
and project-related decline in Environmental Services segment revenue
In the 1st half-year 2007/08, the EVN Group raised its total revenue by
9.0%, to EUR 1,365,0m. The external revenue of the Energy segment rose
12.7%, to EUR 1.276.5m. During the period under review, total revenue in
the Environmental Services segment declined by EUR 30.8m, to EUR 75.8m. The
completion of the large waste incineration facility in Moscow was only
partially offset by the start of various new smaller projects

As a consequence of the increase in the item Electricity purchases and
primary energy expenses, which can be attributed to increased sales volumes
and strong price rises for primary energy in the Energy segment, along with
higher personnel expenses and higher depreciation and amortisation, as well
as increased expenses in South East Europe, the results from operating
activities (EBIT) amounted to EUR 170.6m, or 0.7% below the previous year’s
level. The EBIT margin declined year-on-year from 13.7% to 12.5%.

The financial results of the EVN Group in the 1st half of the 2007/08
financial year declined significantly, posting a 17.0% decrease, or EUR
12.7m, to EUR 61.9m. Whereas income from investments from associates
remained more or less stable, at EUR 94.0m, interest and other financial
result declined by EUR 11.4m. Higher interest income from non-current
financial assets, related to leasing payments for the large projects in
Moscow in the Environmental Services segment, could not compensate for the
negative effects of share price losses resulting from the crisis on global
financial markets.

As a consequence of these developments, the profit before income tax in the
1st half-year 2007/08 amounted to EUR 232.5m, a decline of 5.7% compared to
the previous year. In contrast, despite higher minority interest, the Group
net profit only fell by 0.8%, or EUR 1.4m, to EUR 187.4m, which can be
attributed to a decrease in income tax expense.

Since the last balance sheet date on September 30, 2007, the balance sheet
total of the EVN Group rose by 6.7, to EUR 6,679.1m. Equity climbed by
9.5%, to EUR 3,300.3m, which in turn led to an increase in the equity ratio
from 48.1% as of September 30, 2007 to 49.4%. Taking account of the total
net debt amounting to EUR 1,092.7m, the gearing of the EVN Group amounted
to 33.1%, which continues to be well below the energy sector average.

Outlook
Based on the developments in the 1st half of the 2007/08 financial year, it
will hardly be possible to match the record performance achieved in the
previous year. The strong price rises for primary energy will put further
downward pressure on margins in the Energy segment. Moreover, we expect a
less frequent use of thermal power stations. Several new projects in the
Environmental Services segment will first get underway in the 2nd half of
2007/08, consequently the profit contribution of this segment is expected
to be lower than in the preceding financial year.

The complete Letter to Shareholders HY. 1 2007/08 is available at
http://www.investor.evn.at.

EVN AG
Corporate Communications
EVN Group
Stefan Zach
EVN Platz
2344 Maria Enzersdorf
Tel.: +43 2236 200-122 94
Fax: +43 2236 200-822 94
Mobil: +43 676 810 32 2294
stefan.zach@evn.at
www.evn.at

29.05.2008 Financial News transmitted by DGAP

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
Internet: www.evn.at
ISIN: AT0000741053
WKN: 074105
Indices: ATX
Listed: Foreign Exchange(s) Wien

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