VERBUND AG — Earnings Release 2008

Jul 29, 2008

News Details

Ad-hoc | 29 July 2008 08:00

Österreichische Elektrizitätswirtschafts AG: Verbund once again clearly improves its result in quarters 1-2/2008 and raises earnings forecast

Österreichische Elektrizitätswirtschafts AG / Half Year Results

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

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The business figures of Verbund for quarters 1-2/2008 displayed a further
significant improvement. Sales revenue increased by 10.6 % to € 1,649.2
million, the operating result rose by 26.1 % to € 564.2 million and the
group result was up 30.0 % at € 429.0 million.

The control-specific ratios displayed the following development: The EBIT
margin rose from 30.0 % to 34.2 %, the EBITDA margin improved from 36.1 %
to 39.6 % and net gearing was lowered from 85.2 % to 72.1 %. The operating
cash flow was significantly improved – it increased from € 384.3 million to
€ 950.3 million. The Economic Value Added displayed a plus of 86.7 %.

Ratios Unit Q1-2/2007 Q1-2/2008 Change

Sales revenue million € 1,490.8 1,649.2 10.6 %
Operating result million € 447.4 564.2 26.1 %
Group result million € 329.9 429.0 30.0 %
Net gearing % 85.2 72.1 15.4 %
Operating cash-flow million € 384.3 950.3 147.3 %

Higher sales prices achieved in the European electricity markets

In quarter 1/2008, the spot market prices for electricity recovered from
the very low price level in fiscal 2007. This trend continued in quarter
2/2008, primarily due to the high prices for primary energy sources and CO2
emission rights. For this reason, Verbund once again managed to increase
its average sales prices in the European electricity markets in quarters
1-2/2008.

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

In quarters 1-2/2008, the water supply of the Austrian rivers, which is
measured with a hydro coefficient, came to 1.04 and therefore lay four
percentage points above the average for the last 30 years and 17 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.
20 % compared to 2007 on account of the lower reservoir levels compared to
2007. In total, electricity generation from hydropower rose by 1,303 GWh to
13,009 GWh. Generation at thermal power plants fell by 296 GWh or 17.4 %.
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 14,418 GWh, was 7.5 % higher than in the
previous year.

Foreign joint ventures expanded successfully

In Italy, Verbund and its partner CIR agreed on a capital increase of € 200
million for the joint venture Sorgenia this year and a further capital
increase of € 150 million in 2009. Hence, the direct and indirect interest
of Verbund in Sorgenia, which is now the fifth-largest electricity and gas
utility in Italy, will increase first from 38 % to 41 % and from 41 % to 44
% in the coming year.

In Turkey, Verbund and its Turkish partner Sabanci Holding purchased the
previously public-owned utility Baskent EDAS at the beginning of July 2008.
The purchase price was USD 1.225 billion (approx. € 780 million). The legal
transfer will take place in the coming months.

In addition, the joint venture EnerjiSA, in which Verbund and the Turkish
Sabanci Holding each hold a share of 50 %, is taking further steps towards
realizing its ambitious business plan. EnerjiSA agreed a loan in the amount
of € 1 billion with a bank syndicate led by IFC (a member of the World Bank
Group), West LB and Akbank. The funds will be used to finance power plant
projects in Turkey. With an installed capacity of 5,000 MW, EnerjiSA aims
to win a market share of 10 % in the Turkish electricity market by 2015.

In France, the construction work for the thermal power plant Pont sur
Sambre (412 MW) is already well advanced. Commissioning is scheduled for
quarter 1/2009. Further thermal power plants are currently in the planning
and approval phase.

Expansion of Austrian power plants and grids

In Austria, the power plant and transmission line expansion program
initiated by Verbund in the last few years is progressing at a fast pace.
The decision-making committees of Verbund recently gave the go-ahead for
the construction of the 850 MW Mellach gas power plant near Graz. The
construction of the Styria line, an important section of the future 380 kV
high-voltage ring in Austria, is proceeding according to schedule and the
construction work for the new pumped storage power plant Limberg II, which
will more than double the capacity of the Verbund power plant group Kaprun
by 2012, is even several months ahead of schedule.

Earnings forecast for 2008 raised once again

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 (monthly and quarterly products), 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 interim report 1-2/2008 can be seen on www.verbund.at.

Contact:
Andreas Wollein
Head of Group Finance and Investor Relations
T.: +43 (0)5 03 13 - 52604
F.: +43 (0)5 03 13 - 52694
mailto:investor@verbund.at

29.07.2008 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

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