MVV Energie AG — M&A Activity 2004

Mar 19, 2004

News Details

Corporate | 19 March 2004 16:49

MVV Energie points the way forward for restructuring the Group

Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– MVV Energie points the way forward for restructuring the Group Writing off activities in the field of wind energy, foreign commitments as well as sewage treatment plant construction to the amount of 21 million Euro – CEO Dr. Rudolf Schulten: “We are bundling our strengths for further growth.” The energy distribution and service enterprise MVV Energie has completed its strategic realignment, and in future will concentrate its business on the distribution of electricity, gas, heat and water, thermal environmentally- friendly waste recovery, biomass utilisation, energy services close to core business as well as district heating in Poland and the Czech Republic. Following last weeks Supervisory Board decision on the initial step of spinning off Powerline activities, on Friday it also approved as planned the second package of measures proposed by the Executive Board. As Dr. Rudolf Schulten, the CEO of Germany’s fifth largest energy provider announced after the Supervisory Board meeting in Mannheim, the Group is separating itself from its subsidiaries in Spain, Portugal and Croatia as well as its associated company Awatech, which is active in sewage treatment plant construction. In addition, MVV Energie will not continue to expand the wind energy sector, and in future will not develop any further projects pertaining to its subsidiary eternegy. At the same time the eternegy start-up losses to the amount of approximately 14 million Euro will be written off. On the whole, Dr. Schulten estimated the balance sheet repercussions of this second phase of portfolio adjustment at nearly 21 million Euro. Dr. Rudolf Schulten: “Together with the spin-off of the Powerline business, this year we will expend up to 52 million Euro – on a one-time basis – through valuation adjustments in fixed assets, write-offs on affiliate book values as well as through clearing the debt of the affected subsidiaries. These one-time burdens will be covered through the previous year’s accumulated profits from the sale of shares in Gasversorgung Süddeutschland (GVS). With such a clear step the Group will thus be aligned in terms of profitability, growth and financial solidity, since in future no further ongoing losses will be incurred in the concerned sectors. Of course, we will carry on with the contractually stipulated projects already underway, but we will not conduct any new investments outside our core business.” With the measures now concluded and those being introduced – which should, as far as possible, be completed this year – MVV Energie intends to further expand its strong position in the German and European energy market. Dr. Rudolf Schulten: “We’ve bundled our strengths and are now once again able to act offen- sively on the market.” On the basis of organic growth in the regional energy and service business by the parent company in Mannheim, MVV Energie is also striving to further expand its holdings in German municipal utilities as well as in district heating enterprises in Poland and the Czech Republic. Within the framework of the platform strategy the marketing of energy services shall also be expanded via new investments. The decentral power plant projects in the biomass and waste recovery sectors will be brought together in one business segment, “MVV Umwelt” [“MVV Environment”]. Dr. Rudolf Schulten: “Ecological energy production thus remains a trademark of MVV Energie.” According to the statements by the CEO, the company has been successfully able to adapt within six months to the changing market requirements and the increasing competition: “The Executive Board and the Supervisory Board have thus pointed the way forward for further successful development of the Group. After the necessitated corrections in our portfolio we are now continuing on a course of growth.” On Friday the Supervisory Board also approved the further development of the Group organisation proposed by the Executive Board. Dr. Rudolf Schulten: “In many sectors our structure was not able to pursue the rapid growth of the past few years. With the newly created organisation we are attaining a smooth collaboration among our Group businesses, an improvement in customer orientation as well as an optimisation of the internal administrative control. ” Mannheim, March 19, 2004 MVV Energie AG Investor Relations Luisenring 49 68159 Mannheim Telephone +49 621 / 290-3708 Telefax +49 621 / 290-3075 http://www.mvv-investor.de ir@mvv.de end of message, (c)DGAP 19.03.2004 ——————————————————————————– WKN: 725590; ISIN: DE0007255903; Index: SDAX Listed: Amtlicher Markt in Frankfurt (Prime Standard) und Stuttgart; Freiverkehr in Berlin-Bremen, Düsseldorf und Hamburg 191649 Mär 04