VERBUND AG — Earnings Release 2008

Oct 21, 2008

News Details

Ad-hoc | 21 October 2008 08:00

Österreichische Elektrizitätswirtschafts AG: Verbund once again clearly improves its result in quarters 1-3/2008 and confirms earnings forecast

Österreichische Elektrizitätswirtschafts AG / Quarter Results

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The issuer is solely responsible for the content of this announcement.

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In spite of the upheaval on the financial markets and the impending global
economic crisis, Verbund can present a very good result for quarters
1-3/2008 and confirm that the economic development was indeed very
positive. On the basis of the good earnings trend, Verbund confirms its
earnings forecast for the full year 2008 and expects that the operating
result and the group result will increase by at least 20 % compared to
fiscal 2007.

Sales revenue increased by 17.1% to € 2,637.2 million in quarters 1-3/2008,
the operating result rose by 29.2% to € 885.3 million and the group result
was up 31.6% at € 602.5 million.

The control-specific ratios displayed the following development: The EBIT
margin rose from 30.4 % to 33.6 %, the EBITDA margin improved from 36.4 %
to 38.6 % and net gearing was lowered from 82.0 % to 76.7 %. The operating
cash flow was also significantly improved – it increased from € 512.6
million to € 985.1 million. The Economic Value Added displayed a plus of
44.5 %.

Ratios Unit Q1-3/2007 Q1-3/2008 Change
Sales revenue million € 2,252.6 2,637.2 17.1 %
Operating result million € 685.1 885.3 29.2 %
Group result million € 457.9 602.5 31.6 %
Net gearing % 82.0 76.7 6.5 %
Operating cash flow million € 512.6 985.1 92.2 %

Higher sales prices achieved in the European electricity markets

At the beginning of the year, the spot market prices for electricity
recovered from the very low prices quoted in fiscal 2007. This trend
continued in the following months, primarily due to the still high prices
for primary energy sources and CO2 emission rights. Verbund was therefore
able to significantly increase its average sales prices in the European
electricity markets in quarters 1-3/2008. Based on the present situation, a
further clear increase can also be expected in fiscal 2009.

Increase in generation from hydropower / one-off effect lowers thermal
generation

In quarters 1-3/2008, the water supply of the Austrian rivers, which is
measured with a hydro coefficient, came to 1.02 and therefore lay two
percentage points above the average for the last 30 years and 11 percentage
points above the value recorded in the previous year. Generation at the
run-of-river power plants therefore displayed a clear increase compared to
the previous year. Generation at the storage power plants fell by approx.
3% on account of the lower reservoir levels compared to 2007.

In total, electricity generation from hydropower rose by 1,681 GWh to
20,200 GWh. Generation at thermal power plants fell by 421 GWh to 2,248
GWh. This is largely attributable to the one-off renovation work at
Dürnrohr power plant which was carried out between April and June. The
total generation of the group, at 22,448 GWh, was 5.9 % higher than in the
previous year.

One-off effects in other operating expenses and the financial result

Other operating expenses include negative one-off effects, primarily for
renovation measures, in the amount of € 41.4 million while the financial
result includes a negative one-off effect resulting from the impairment of
securities in the amount of € 25.0 million.

New power plant project abroad

Verbund secured a contract for the construction of the 48 MW Ashta
hydropower plant on the River Drin near the town of Shkoder in Albania. The
corresponding contract was signed on 30 September in Tirana. The project
will be carried out in cooperation with EVN under the industrial leadership
of Verbund. Commissioning is planned for 2012.

Progress has also been made in the renewable energies area where activities
have been intensified this year: The two photovoltaic power plants acquired
by Verbund in Spain were connected to the grid just a few days ago. The
plants have a total capacity of 3 MW.

Verbund’s joint ventures in Italy, France and Turkey are also developing
very well.

Effects of the financial market crisis on Verbund

Verbund's growth strategy has hardly been impacted by the turbulence on the
international financial markets. Due to the positive earnings trend, the
increasing cash flow and the strong rating, Verbund has strong internal
financing power and adequate liquidity.

Earnings forecast for 2008 confirmed

Assuming an average water supply for the remainder of the year as well as a
stable development of the spot market prices and the short-term forward
prices, we expect that the operating result and the group result will
increase by at least 20 %. In addition, we intend to further increase the
dividend for fiscal 2008 on the basis of a pay-out ratio of between 45 %
and 50 %.

The full report of quarters 1-3/2008 can be seen on www.verbund.at.

Contact:
Andreas Wollein
Leiter Finanzmanagement und Investor Relations
T.: +43 (0)5 03 13 - 52604
F.: +43 (0)5 03 13 - 52694
mailto:investor@verbund.at

21.10.2008 Financial News transmitted by DGAP

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
Internet: www.verbund.at
ISIN: AT0000746409
WKN: 877738
Indices: ATX
Listed: Regulierter Markt in Frankfurt (General Standard);
Freiverkehr in Berlin, Hamburg, Düsseldorf, München,
Stuttgart; Foreign Exchange(s) Wien

End of News DGAP News-Service

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