EVN AG — Earnings Release 2015

Dec 10, 2015

News Details

Corporate | 10 December 2015 08:00

EVN AG: Business development in the 2014/15 financial year

DGAP-News: EVN AG / Key word(s): Final Results

2015-12-10 / 08:00
The issuer is solely responsible for the content of this announcement.

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Business development in the 2014/15 financial year
(1 October 2014 - 30 September 2015)

Highlights

* Successful sale of the sodium hypochlorite plant to the water supply and
wastewater disposal company of the city of Moscow
* Increase in electricity generation by 11.1%
- Rise in renewable energy production due to the commissioning of the
37 MW windpark Prottes-Ollersdorf as well as higher wind and water
flows
- Substantial rise in the use of the natural gas-fired power plants to
support network stability
- First full-year operation of the Duisburg-Walsum power plant
* Positive earnings contribution from the energy business in South East
Europe
* Increase in operating results and Group net result
* Reduction of net debt due to strong operating cash flow
* Dividend proposal to the 87th Annual General Meeting in the amount of
EUR 0.42 per share
* Reduction of energy prices for electricity and natural gas by an average
of 5% each for household customers within the framework of EnergieAllianz
Austria as of 1 October 2015.

Key figures

* Revenue: +8.2% to EUR 2,135.8m
* EBITDA: EUR +399.2m to EUR 583.2m
* Results from operating activities (EBIT): EUR +609.6m to EUR 268.2m
* Financial result: EUR -28.4m to EUR -60.3m
* Group net result: EUR +447.1m to EUR 148.1m
* Net debt: EUR 1,230.9m (30.09.2014: EUR 1,622.4m)

Energy sector environment

The average temperatures in Austria during the reporting period were nearly
unchanged compared with the previous year, which was characterised by an
unusually mild winter. In contrast, substantially lower temperatures were
recorded in South East Europe. The prices for primary energy carriers such
as crude oil, natural gas and hard coal continued to decline in 2014/15.
The reporting year also brought a further decline in forward prices on the
European electricity exchanges, with a year-on-year minus of 3.8% to EUR
34.9 per MWh for base load and a minus of 5.4% to EUR 43.8 per MWh for peak
load.

Increase in EBITDA, EBIT and Group net result

Revenue recorded by the EVN Group increased by 8.2% to EUR 2,135.8m in
2014/15. This growth was supported by the increase in electricity
generation as well as by the expansion of the company's natural gas trading
activities. Positive impulses were also provided by the investments in
South East Europe. The absence of last year's negative one-off effects and
the weather-related higher sales volumes made an important
contribution to the improvement in revenue. Other operating income
increased by 52.3% to EUR 108.4m. This strong improvement reflected the
increased work in process in the network business as well as the sale of
the shares in the property company that holds the sodium hypochlorite
plant.

Taking into account higher cost of electricity purchases from third parties
and primary energy expenses due to the first full year of operations in the
Duisburg-Walsum power plant, EVN recorded an EBITDA of EUR 583.2m for
2014/15, an increase of EUR 399.2m over the previous year. Depreciation and
amortisation rose by 1.7% to EUR 260.3m, above all due to the ongoing
investments in the networks and the expansion of renewable production
capacity. Including the results of impairment tests, the results from
operating activities (EBIT) amounted to EUR 268.2m and exceeded the
previous year by EUR 609.6m.

Financial results amounted to EUR -60.3m and were EUR 28.4m lower than the
previous year. This change reflected a decline in the dividend from Verbund
AG for the 2014 financial year and the termination of the hedge for the
financing of the sold sodium hypochlorite plant in Moscow as well as the
costs for the related investment guarantee issued by the Federal Republic
of Germany. In total, profit before income tax for the 2014/15 financial
year equalled EUR 207.9m (previous year: EUR -373.3m).

Group net profit rose to EUR 148.1m for the 2014/15 financial year
(previous year: EUR -299.0m). The Executive Board will therefore recommend
the distribution of a stable dividend of EUR 0.42 per share for the 2014/15
financial year to the 87th Annual General Meeting (previous year: EUR
0.42). This corresponds to a dividend yield of 4.3% (previous year: 4.1%)
based on the share price of EVN AG on 30 September 2015 (EUR 9.854).

Reduction of net debt due to strong operating cash flow

The strong cash flow from operating activities allowed EVN to reduce net
debt by EUR 391.5m to EUR 1,230.9m during the reporting year. The equity
ratio rose to 39.8% (previous year: 38.5%), and the gearing ratio decreased
from 61.6% to 47.5%.

Developments in the energy and environmental services business

Energy business

EVN successfully continued its investment programme during the report
period. The programme was already started in 2013/14 and has a total volume
of EUR 1bn which will be invested over a period of four years. The focus
will be placed on network investments to transport the growing feed-in
volumes from renewable energy generation and to protect network stability.
Another focus of the investment strategy is set on the expansion of
generation capacities from renewable energy sources. The commissioning of
the Prottes-Ollersdorf windpark gives EVN a current wind generation
capacity of 250 MW. EVN plans to raise its installed windpower capacity to
300 MW over the next few years.

In the medium term a generation mix consisting of both thermal and
renewable production capacities is required to protect supply security.
Plans therefore call for the Dürnrohr coal-fired power plant to remain in
operation up to the end of its technical useful life to support the system
conversion to renewable energy and to balance fluctuations in the
production of renewable energy. As in the past few years, the Theiss and
Korneuburg power plants also provided reserve capacity for southern Germany
during the winter of 2014/15. EVN's power plants were called on more than
80 times during 2014/15 to support network stability in Austria and
Germany. A contract was signed which covers the allocation of 775 MW in
reserve capacity for southern Germany during the winter half-year 2016/17.
The power plants will therefore supply these services up to and including
the winter half-year 2017/18.

EVN's sales company again passed on the benefits from lower energy
procurement costs in the form of a price reduction. The energy prices for
electricity and natural gas were reduced by an average of 5% each for
household customers within the framework of EnergieAllianz Austria as of 1
October 2015.

Environmental services business

Investments in drinking water supplies for Lower Austria are focused on
supplying new communities with drinking water and improving the quality and
supply security of drinking water for existing customers. EVN made decisive
progress in this area during the reporting year with the commissioning of
two natural filter plants which reduce the hardness of the water by natural
means.

In the international project business, EVN worked on the realisation of
eight projects in the Czech Republic, Poland, Montenegro, Romania and
Cyprus during 2014/15. Most of these projects involve EVN's services as the
general contractor with responsibility for the planning and construction of
the plant, while the financing is arranged by the customer.

Outlook

Under the assumption of average conditions in the energy environment, the
Group net result for 2015/16 is expected to remain largely stable. The
factors that could significantly influence this net result include the
regulatory background, developments in the proceedings related to claims
from the tariff decisions in Bulgaria and the Duisburg-Walsum power plant
as well as the progress on activities in Moscow.

For the complete Full Report 2014/15 see www.investor.evn.at.

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2015-12-10 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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 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)


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