VERBUND AG — Earnings Release 2009

Jul 28, 2009

News Details

Ad-hoc | 28 July 2009 08:01

Österreichische Elektrizitätswirtschafts AG: HY results 2009: Good business development burdened by negative one-off effects – stable outlook for 2009 confirmed

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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Verbund, Austria's leading electricity company, reports good development of
operating earnings in quarters 1 and 2/2009, which, however, is marked by
negative one-off effects.

Compared to the record results 2008, sales increased by 1.1% to EUR 1,667.8
million, the operating result dropped by 5.4% to EUR 533.7 million, and the
group result shrunk by 16.1% to EUR 359.9 million. The control-specific
business key ratios developed as follows: The EBIT margin dropped from 34.2
% to 32.0 %; gearing increased from 71.5 % to 98.9 %; the operating cash
flow fell from EUR 950.3 million to EUR 540.1 million. The Economic Value
Added
(EVA), the control-specific key ratio for Verbund for value creation,
dropped by EUR 92.2 million to EUR 242.9 million.

Key Ratios Unit Q1-2/2008 Q1-2/2009 Change
Sales million EUR 1,649.2 1,667.8 1.1 %
Operating result million EUR 564.2 533.7 -5.4 %
Group result million EUR 429.0 359.9 -16.1 %
Economic Value Added million EUR 335.1 242.9 -27.5 %
Gearing % 71.5 98.9 -38.3 %
Operating Cashflow million EUR 950.3 540.1 -43.2 %

Low spot market prices and one-off effects burden results

The earnings development was essentially influenced by low European spot
market prices for electricity, an above average water supply, and negative
one-off effects.

The spot market price level for electricity dropped sharply in quarters
1-2/2009 compared to the previous year. More specifically, it was down 35%
for base load and 36% for peak electricity. This decline reflects the
fallen level of the CO2 spot market prices, the considerably lower prices
for primary energy sources and the lower demand for electricity. Also the
prices for quarterly and monthly forwards for electricity have dropped
considerably compared to the previous year. Verbund sells approximately 40%
of its own generation on the basis of spot market prices as well as
quarterly and monthly forwards. The remaining 60% had already been sold one
year in advance for electricity prices that were still considerably higher
as part of the tried and proven hedging strategy.

The above-average water supply in Austria's streams had a positive effect
on the quarterly results. At 1.07, the hydro coefficient in quarters
1-2/2009 was 7% higher than the long term average and 3% above last year's
value. Hence, it was possible to generate more electricity in the
run-of-river power plants. However, it was also possible to increase
generation from storage power plants as a consequence of the higher storage
levels at the beginning of the year compared to 2008 and outstanding
tributary conditions from the melting snow. The Verbund Group's hydropower
generation increased by a total of 4.0% or 519 GWh. However, it was only
possible to sell these additional quantities on the basis of the low spot
market price level described above, which put a damper on the positive
effect of the additional quantities. Thermal generation declined by 16.4%
or 230 GWh compared to the previous year because of the low spot market
price level. Generation from the wind and sun amounted to 59 GWh in
quarters 1-2/2009. On the whole, the own generation increased by 347 GWh to
14,765 GWh.

The development of Verbund's earnings was influenced by special financial
effects, as was the case in the first quarter of 2009. In total, they had
negative effects on the operating result to the extent of around EUR 65
million and around EUR 10 million on the financial result.

Strong position solidified

In spite of the difficult market environment, Verbund was able to further
solidify its strong position in the European electricity market. In June
2009, Verbund signed a purchase agreement with Germany's E.ON for 13
run-of-river power plants on the Inn River in Bavaria with an installed
capacity of 312 MW and annual generation of 1.874 GWh. Verbund also
strengthened its position as the leading electricity company in Austria.
The Group will supply a total of 10 TWh of hydropower electricity to the
provincial utilities EVN and Wien Energie between 2010 and 2013. Verbund's
international involvement also developed positively. In France, Verbund
acquired 13.4% of the joint venture Poweo from shareholder Charles
Beigbeder and his Holding Gravitation. This increased Verbund's holdings to
a total of around 43.3% making it the largest single shareholder.

Outlook

In spite of continued, difficult, economic conditions, and in spite of
falling half-year results, Verbund is still aiming for approximately the
same results over the entire year of 2009 as the previous year on the basis
of stable operating business.

You can find detailed information on the interim results of quarters
1-2/2009 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

28.07.2009 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, Düsseldorf, München, Hamburg,
Stuttgart; Foreign Exchange(s) Wien

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