VERBUND AG — Earnings Release 2009

Oct 27, 2009

News Details

Ad-hoc | 27 October 2009 07:59

Österreichische Elektrizitätswirtschafts AG: quarter 1-3/2009: Result slightly down due to low spot market prices for electricity and negative one-off effects

Österreichische Elektrizitätswirtschafts AG / Quarter Results

27.10.2009

Dissemination of an Ad hoc announcement, transmitted by
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The issuer is solely responsible for the content of this announcement.

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For quarters 1-3/2009, Verbund, Austria's leading electricity company,
presents a satisfactory result, which, nevertheless, is below the record
result of the corresponding period of the previous year.

Compared to the record year 2008, sales revenue dropped by 7.2% to EUR
2,446.7 million, the operating result sank by 9.3% to EUR 802.9 million and
the group result shrunk by 8.4% to EUR 551.8 million. The control-specific
business key ratios showed the following development: The EBIT margin sank
from 33.6% to 32.8%, gearing rose from 76.5% to 127.3% and the operating
cash flow fell from EUR 985.1 million to EUR 707.3 million. The Economic
Value Added (EVA), the control-specific key ratio for the Verbund Group for
value creation, dropped by EUR 147.3 million to EUR 317.0 million.

Ratios Unit Q1-3/2008 Q1-3/2009 Change
Sales revenue million EUR 2,637.2 2,446.7 -7.2%
Operating result million EUR 885.3 802.9 -9.3%
Group result million EUR 602.5 551.8 -8.4%
Economic value added million EUR 464.3 317.0 -31.7%
Gearing % 76.5 127.3 66.4%
Operating cash-flow million EUR 985.1 707.3 -28.2%

Low spot market prices and negative one-off effects burden operating result

As in quarters 1 and 2, the operating performance was essentially
characterized by the low European spot market prices for electricity, an
above-average water supply and negative one-off effects.

Compared to the corresponding period of the previous year, the spot market
prices for electricity fell sharply by 40% for baseload and by 41% for peak
load electricity. This drop reflects the lower CO2 spot market prices, the
significant decline in prices for primary energy sources and the lower
demand for electricity. Compared to the levels recorded in the previous
year, the prices for quarterly and monthly electricity forwards also showed
a noticeable decline. Verbund trades approx. 40% of its own generation on
the basis of spot market prices as well as quarterly and monthly forwards.
The remaining 60% was already sold one year in advance at significantly
higher prices in the context of the hedging strategy.

The above-average water supply from Austria's rivers and streams had a
positive impact on the result for the quarter. The hydro coefficient for
quarters 1-3/2009 was at 1.07, which was 7% above the long-term average and
5% above the value recorded in the previous year. As a result, more
electricity was produced in the run-of-river power plants. Generation at
the storage power plants was also increased, specifically due to the higher
reservoir levels at the beginning of the year compared to 2008, and the
excellent inflow conditions resulting from the snowmelt. Hydropower
generation within the Verbund Group rose by a total of 6.3% or 1,272 GWh.
For the most part, however, these additional volumes could only be sold on
the basis of the low spot market price levels mentioned above, and this
dampened the positive effect of the additional volumes. Compared to the
previous year, thermal production showed a decline by 32.6% or 734 GWh due
to the low spot market price levels. Wind and solar energy generation
amounted to 77 GWh in the quarters 1-3/2009. In total, energy generation
increased by 616 GWh to 23,064 GWh.

As in the result for the half-year, the operating result was again burdened
by negative one off effects in the amount of around EUR 74 million while
about EUR 23 million of positive one-off effects were recorded in the
financial result.

Strong position consolidated

Although no sustained recovery of the economy is yet in sight, Verbund is
adhering to its anti-cyclical investment activities and aims to profit to
an even greater extent from a future economic upturn. In this respect,
Verbund is focusing on the expansion of renewable energy sources, in
particular hydropower, and the modernization of the domestic electricity
grid. The investments in the foreign core markets Turkey, France and Italy
will also be continued - even if there may be some deviations from the
schedule.

Against this background, Verbund has further consolidated its strong
position in the European energy market. The takeover of 13 hydropower
plants on the Bavarian Inn from German E.ON was completed on August 31,
2009. The Inn power plants with a total capacity of 312 MW are operated by
VERBUND-Innkraftwerke GmbH based in Bavaria. From September 2009 onward,
the annual generation of Verbund will thus increase by 1.8 TWh.

Verbund has also expanded its activities in the French electricity market.
In the context of a capital increase in the amount of EUR 75 million in
quarter 3/2009 and the acquisition of the shares of POWEO founder Charles
Beigbeder and shares of POWEO co-founder Frédéric Granotier, Verbund has
raised its stake in POWEO S.A. to 46.0%. This makes Verbund the largest
single shareholder in the company.

Outlook

In light of the sustained difficult economic conditions and the extremely
weak spot market prices, we expect our figures for 2009 as a whole to be
down slightly on the previous year. We are maintaining our dividend policy
and are aiming to achieve a payout ratio of at least 45%.

Detailed information on the interim results of quarters 1-3/2009 can be
found at http://www.verbund.at/. Effective immediately, the interim report
as well as a user-friendly online version are available there.

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

27.10.2009 Financial News transmitted by DGAP

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Language: English
Company: 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, Düsseldorf, München, Hamburg,
Stuttgart; Foreign Exchange(s) Wien

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