EVN AG — Earnings Release 2013

Feb 28, 2013

News Details

Corporate | 28 February 2013 08:00

EVN AG: Business development in the 1st Quarter 2012/13

EVN AG / Key word(s): Quarter Results

28.02.2013 / 08:00

---

(October 1st, 2012 - December 31st, 2012)

• Biomass district heating plant in Steyr supplies customers with heat and
  electricity
• First construction phase of the natural gas transport pipeline
  Westschiene completed
• EVN Netz GmbH acquired a 15%-stake in AGGM Austria Gas Grid Management AG
• Contract awarded for planning and construction of three further
  wastewater treatment plants in Romania
• Emission of promissory note loans of EUR 121.5m
• On-going share buyback programme extended and repurchase volume increased
  by further 1,000,000 shares
• Prior-year figures were adjusted according to IAS 19
• Outlook 2012/13: results from operating activities and Group net profit
  are expected to be below the prior-year level

                                    2012/13    +/-
  

  EURm Q. 1 in %
  Revenue 794.0 -4.3
  EBITDA 173.5 -0.5
  Results from operating activities (EBIT) 116.2 4.3
  Group net profit 71.5 -21.8

Energy sector development

The reporting period failed to bring any improvement in the unfavourable
conditions on the European electricity market or the weak economic
environment. The relatively warm weather and an unexpected high supply of
electricity from renewable energy sources led to a decline in the forward
prices for electricity. In contrast, oil and natural gas prices remained at
a high level and the generation of electricity from gas-fired power plants
in Europe is therefore still not profitable. The demand for electricity is
covered by heavily subsidised generation from renewable energy sources and
from existing coal-fired power plants, which have become comparatively more
attractive due to the decline in the price of coal and CO2 emission
certificates.

Lower gas trading, mild weather and decreased project implementation
volumes

EVN recorded a 4.3% decline in revenue to EUR 794.0m for the first quarter
of the 2012/13 financial year. Revenue in the energy business was
negatively influenced by several factors: marketing sales volumes of
natural gas were lower than the previous year and electricity sales to end
consumers decreased as a result of the significantly milder weather in
South Eastern Europe, the weak economy and improved energy efficiency.
Revenue in the Environmental Services segment fell following the conclusion
of several international projects in the previous year.

Stable EBITDA, higher EBIT but Group net profit below prior-year level

In spite of lower revenue, EVN achieved a stable EBITDA at EUR 173.5m
compared to the prior-year figure. This development can be mainly
attributed to the decrease in the item 'Electricity purchases and primary
energy expenses' as well as higher other operating income. Depreciation and
amortisation fell by 9.0% to EUR 57.2m.
The comparable prior-year figures were negatively affected by an impairment
charge of EUR 8.0m to the biomass pilot plant in Dürnrohr. As a consequence
of these developments, the results from operating activities were up 4.3%
from the level of the previous year, to EUR 116.2m. The financial results
dropped from EUR 13.1m to EUR -11.7m, primarily due to the negative
contribution from EconGas. Subsequently, the Group net profit fell by 21.8%
to EUR 71.5m.

Positive cash flow development, stable equity, higher gearing

In the first quarter of the 2012/13 financial year, the gross cash flow
rose by 1.4% to EUR 151.6m, in spite of the decline in profit before income
tax. Net cash flow from operating activities rose from EUR 25.9m to EUR
54.7m due to a lower year-on-year increase in working capital as a result
of the mild weather, especially in South Eastern Europe. EVN's balance
sheet total equalled EUR 7,204.7m as of December 31st, 2012, which is 5.0%,
higher than the level on September 30th, 2012. Equity rose by 5.2%, to EUR
3,170.9m and the equity ratio of 44.0% can be named as stable. Based on a
net debt of EUR 1,739.4m (September 30th, 2012: EUR 1,703.7m), gearing
equalled 54.9%, which represents an improvement of 1.6 percentage points
over the value on September 30th, 2012.

Outlook

From the current point of view, we expect no additional use of EVN's fully
depreciated gas-fired power plants in 2012/13 - with the exception of power
supplies to the Federal Network Agency in Germany. In addition to the
above-mentioned factors in the energy sector, the following issues will
influence the development of business at EVN during the remaining three
quarters of the 2012/13 financial year: in Austria, the regulatory
authorities reduced the electricity network tariffs by an average of 0.4%
and natural gas network tariffs by 2.8% as of January 1st, 2013. In
Bulgaria, the high subsidies to renewable electricity significantly
increase the electricity procurement costs.
On this basis, the rise of end customer prices for electricity by the
regulator in July 2012 led to social uncertainty and demonstrations in the
current heating period. We expect the forthcoming parliamentary elections
to become the basis of normalisation. Legal regulations governing renewable
energy require the reimbursement of these additional costs by end
customers. The resulting expected claims are being recognised as
receivables. Similar to the first quarter of 2012/13, the winter at the
start of 2013 was also significantly milder than the previous year. This is
true, above all, for South Eastern Europe.

Based on the current point of view and given the present unfavourable
economic and energy sector conditions, EVN expects results from operating
activities and Group net profit for 2012/13 to be below the prior-year
level.

EVN's Letter to Shareholders Q. 1 2012/13 is available at
www.investor.evn.at.

End of Corporate News

---

28.02.2013 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

DGAP's 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

202527 28.02.2013