VERBUND AG — Earnings Release 2006

Jul 24, 2006

News Details

Ad-hoc | 24 July 2006 09:01

Österreichische Elektrizitätswirtschafts AG: excellent half-year results 2006

Ad hoc announcement transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— Verbund presents excellent half-year results 2006 Operating result increased to € 426.5 million (+71.6 %) – profits after taxes rose to € 337.6 million (+64.7 %) – group result up at € 275.4 million (+48.1 %); share performance further improved (+24.8 %); Verbund, Austria’s leading electricity company, once again presents extraordinarily good results for quarters 1-2/2006: the operating result increased to € 426.5 million and was therefore 71.6 % over the value reported in the previous year, the group result was up 48.1 % at € 275.4 million and net gearing also displayed a significant improvement on quarters 1-2/2006 at 80.3 %. The Verbund share achieved a positive performance of 24.8 %. On the basis of this development, Verbund is one of the most dynamic utility stocks at an international level with above-average growth rates. Due to the group’s hedging strategy, the positive earnings trend was not adversely influenced by the negative effects of the drop in wholesale prices for electricity. At the beginning of quarter 2006, the long-term wholesale prices fell significantly after a period of steady – and, in part, quite substantial – growth in the previous quarters. Thanks to Verbund’s hedging strategy – 60 % of the total volume of electricity produced was already sold in 2005 on a year-ahead basis for 2006 –, the price decreases did not have a negative impact on the group result. The average sales prices increased in spite of the price correction. The spot market prices also declined in quarter 2/2006. This decline, however, was more than compensated by the strong increase in electricity generated from hydropower. The late onset of the thaw and heavy precipitation in quarter 2/2006 resulted in an above-average water supply from the Austrian rivers and streams. Excellent earnings trend The earnings trend in quarters 1-2/2006 was therefore excellent: sales revenue increased by 43.3 % to € 1,663.1 million, the operating result rose by 71.6 % to € 426.5 million and the group result was up 48.1 % at € 275.4 million. The controlling group ratios also displayed a significant improvement. The EBIT margin rose from 21.4 % to 25.6 %, net gearing fell from 115.0 % to 80.3 % and the operating cash flow improved by 39.8 % to € 462.3 million. Ratios Unit Q1-2/2005 Q1-2/2006 Change Sales revenues million € 1.160,8 1.663,1 43,3% Operating result million € 248,6 426,5 71,6% Group result million € 186,0 275,4 48,1% EBIT margin % 21,4 25,6 19,6% Net gearing % 115,0 80,3 30,2% Operating cash-flow million € 330,7 462,3 39,8% Good performance of Verbund share The share price of Verbundgesellschaft developed well ahead of the Austrian Traded Index (ATX) and the relevant benchmark index Dow Jones Stoxx Utilities: since the beginning of the year, the ATX increased by 2.1 % and the Dow Jones Stoxx Utilities by 9.4 %. The Verbund share, however, improved by a further 24.8 %. Positive outlook for 2006 The outlook for fiscal 2006 is very positive. Verbund anticipates that the operating result for the full year 2006 will be up approx. 40 % on the value reported in the previous year. The group result is expected to improve by 30 % and net gearing should, on the basis of the current planning parameters, be reduced to below 70 %. In addition, the group is planning a further increase in the dividend for fiscal 2006. Detailed information on the Verbund results for quarter 1-2/2006 can be found under www.verbund.at where a user-friendly online version of the quarterly report can also be viewed. Mag. Andreas Wollein Head of Investor Relations Tel.: +43 (0)5 03 13-52616 Fax: +43 (0)5 03 13-152616 mailto:andreas.wollein@verbund.at (c)DGAP 24.07.2006 ————————————————————————— Language: English Issuer: Österreichische Elektrizitätswirtschafts AG Am Hof 6A 1010 Wien Österreich Phone: 0043-1-53113-52616 Fax: 0043-1-53113-52694 E-mail: andreas.wollein@verbund.at WWW: www.verbund.at ISIN: AT0000746409 WKN: 74640 Indices: ATX Listed: Amtlicher Markt in Wiener Börse, Frankfurt (General Standard); Freiverkehr in Berlin-Bremen, Stuttgart End of News DGAP News-Service —————————————————————————