EVN AG — Interim / Quarterly Report 2007

Feb 27, 2007

News Details

Corporate | 27 February 2007 08:00

EVN AG: Development of business in the first quarter of 2006/07 (October 1 – December 31, 2006)

EVN AG / Quarter Results

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

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                                                      7 February 2007

Press Release

Development of business in the first quarter of 2006/07
(October 1 – December 31, 2006)

· First-time 1st quarter consolidation of the Macedonian subsidiary
ESM AD
· Mild winter dampens business results
· Drinking water facility in Moscow commences operations
· Completion of next biological extension phase for wastewater
purification plant in Zagreb
· Ground-breaking ceremony for the coal-fired power plant in
Duisburg-Walsum
· As best bidder, EVN was given approval by anti-trust authorities
to acquire a district heating facility in Plovdiv, Bulgaria

                        2006/07
                    1st Quarter          Change
                          EUR m          in %

Sales revenues 612.2 + 11.8
EBITDA 117.5 - 8.7
Operating result(EBIT) 75.4 - 14.0
Group net profit 73.4 - 10.7

Despite a further significant increase in revenue, the EVN Group net profit
during the 1st quarter of the 2006/07 financial year was below the high
comparable level posted in the previous year. The extraordinary mild winter
temperatures led to a decline in sales volumes in the Energy segment.
Furthermore, the drop in sales volumes was even more pronounced due to the
fact that the comparable period in the previous financial year was marked
by extremely low temperatures. The contributions of the Environmental
Services segment basically matched the level achieved in the same period of
the previous financial year. The Macedonian subsidiary ESM AD was
incorporated for the first time into the 1st quarter consolidated financial
statement of the EVN Group.

EVN Group revenue climbed to EUR 612.2m in the 1st quarter 2006/07, an
increase of 11.8% compared to the previous year, primarily due to the
initial consolidation of our Macedonian subsidiary. However, the results
from operating activities (EBIT) declined by 14.0% compared to the level
achieved in the 1st quarter of the 2005/06 financial year. This can be
attributed to the overall decline in sales volumes, necessary impairments
of receivables in Macedonia as well as unfavourable tariff changes imposed
by the regulatory authorities in Bulgaria. The financial results of EUR
42.8m basically matched last year´s level. The Group net profit fell by
10.7%, to EUR 73.4m.

Energy segment posts decline in sales volumes

In terms of the heating degree total, the temperatures in the areas in
Austria supplied by EVN were close to 17% higher in the 1st quarter 2006/07
than in the comparative period of the preceding year, and about 25% above
the long-term average. For this reason, gas sales volumes to end customers
declined by about one-fifth, whereas heating sales volumes decreased by
more than 5%. The extremely mild winter has enabled household, commercial
and industrial customers to benefit from cost savings of about 20% alone in
the 1st quarter 2006/07.

Start-up of large-scale projects in the Environmental Services segment

In the 1st quarter 2006/07, our subsidiary WTE concluded or made
significant progress on two major projects in the Environmental Services
segment. At the beginning of November 2006, the company transferred, on
schedule, a new drinking water facility supplying one million inhabitants
to the City of Moscow. In addition, WTE reached a further important
milestone in mid-October 2006, starting up and transferring the next
extension phase of the central municipal wastewater treatment plant,
involving the second tier of biological wastewater purification, to the
Croatian capital of Zagreb. In the future, it can be expected that WTE will
also continue its business operations at a high level. In addition to two
new contracts won by the WTE Group in the Baltic States in the 1st quarter
2006/07, WTE is on the verge of concluding contracts to implement other
large projects in Cyprus, the Baltic States and on behalf of big cities in
the Russian Federation.

Dynamic development of international business

In the Energy Segment, the ground-breaking ceremony for the planned
coal-fired power plant in Duisburg, Germany with an overall capacity of 790
MW, to be jointly constructed in cooperation with STEAG, took place in
November 2006. EVN has a 49% stake in the project, with a total investment
volume of EUR 820m. The new power plant, which is expected to commence
operations in 2010, will be financed for the most part by debt in the form
of a syndicated credit granted to the project company, and by based on an
equity share of 25%.

Within the framework of Bulgaria’s privatisation process, EVN was
identified in October 2006 as the best bidder for a district heating
facility serving 62,000 customers in Plovdiv and Asenovgrad. In the
meantime, following the formal approval of Bulgaria’s anti-trust
authorities, we expect the closing of the transaction to take place in the
first half of 2007.

Outlook

In terms of the future perspectives of the EVN Group for the entire 2006/07
financial year, it will hardly be possible to approach the record results
of the Energy segment posted in the preceding financial year, as a
consequence of the extremely mild tem-peratures prevailing this winter. The
network tariff cuts effective January 1, 2007, as stipulated by the
Austrian regulatory authority (E-Control), also put downward pressure on
our margin.

According to Burkhard Hofer, Speaker of the EVN Executive Board, 'The
internationalisation of EVN in the energy business shows a very positive
development. EVN took a new step in its core market of South East Europe by
concluding a Memorandum of Understanding with the Albanian Government. In
the Environmental Services segment, we expect an increase in revenue and
earnings as a consequence of the completion of the large drinking water
project in Moscow, and the start-up of the waste incineration plant in
Moscow planned for the upcoming summer. If crude oil prices remain low, EVN
will pass on the cost advantage related to reduce gas procurement costs to
consumers in the next few months, in the form of a reduction in energy
prices. The Group net profit in 2006/07 will not match the very high level
achieved in the past financial year.'

EVN’s Letter to Shareholders for the 1st quarter 2006/07 can be downloaded
from www.investor.evn.at

EVN in figures

Key energy business
indicators 2006/07 2005/06 Change
Q. 1 Q. 1 Nominal %
Electricity production (GWh) 1,246 1,475 -229 -15.5
thereof thermal power 995 1,309 –314 –24.0
thereof renewable energy 251 166 85 51.4

Distribution volumes
Electricity (GWh) 4,937 3,761 1,177 31.3
thereof Austria 1,909 1,899 10 0.6
thereof Bulgaria 1,771 1,862 –91 –4.9
thereof Macedonia 1,257 – 1,257 -
Gas (m m³)1) 539 680 –140 –20.6

Supply volumes to end customers
Electricity (GWh)2) 4,712 3,556 1,156 32.5
thereof Austria 1,684 1,694 –10 –0.6
Gas (m m³)3) 211 263 –52 –19.8
Heating (GWh) 332 351 –19 –5.3

1) Incl. network sales to EVN power stations
2) In Bulgaria and Macedonia, the energy sales to end customers
correspond to the network sales
3) Incl. gas wholesales amounting to 25 m m3 (previous year: 28 m m3)

Income statement (IFRS)

                           2006/07     2005/06              Change
                              Q. 1        Q. 1
                             EUR m       EUR m        EUR m      %

Energy revenue 543.0 473.8 69.2 14.6
Environmental services
revenues 63.4 62.9 0.5 0.8
Strategic Investments and
Other Business revenue 5.8 11.1 –5.3 –47.6

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Total revenue 612.2 547.8 64.4 11.8
Changes in work in progress
and own work capitalised
and other operating income 12.5 11.6 0.8 7.0
Electricity purchases and
primary energy expenses –337.8 –283.2 –54.6 –19.3
Cost of material and services –75.4 –68.5 –6.9 –10.1
Personnel expenses –65.8 –64.1 –1.7 –2.6
Depreciation and amortisation –42.0 –40.9 –1.1 –2.7
Other operating expenses –28.3 –15.0 –13.3 –88.5

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Results from operating
activities (EBIT) 75.4 87.7 –12.3 –14.0
Income from investments
in associates 28.7 30.8 –2.2 –7.0
Interest and other
financial results –3.9 –6.4 2.5 39.0

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Financial results 24.8 24.5 0.3 1.3

Profit before income tax 100.2 112.2 –12.0 –10.7
Income tax expense –19.8 –21.3 1.5 6.8

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Net profit for the period 80.4 90.9 –10.5 –11.6
thereof
Minority interests 7.0 8.7 –1.7 19.7

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EVN AG shareholders
(Group net profit) 73.4 82.2 –8.8 –10.7

                               EUR         EUR          EUR      %

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Earnings per share1) 1.80 2.01 –0.21 –10.7

1) Diluted equals undiluted earnings

DGAP 27.02.2007

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

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