VERBUND AG — Earnings Release 2011

Jul 27, 2011

News Details

Ad-hoc | 27 July 2011 08:00

VERBUND AG: Q1-2/2011: Operating result up despite extraordinarily weak water supply

VERBUND AG / Key word(s): Half Year Results/Half Year Results

27.07.2011 08:00

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VERBUND, Austria's leading utility, presents a slightly higher operating
result for quarters 1-2/2011, but a lower Group result.

Key figures Unit Q1-2/2011 Q1-2/2010 Change
Revenue EURm 1,867.9 1,582.0 18.1%
Operating result EURm 388.7 382.3 1.7%
Return on sales (EBIT margin) % 20.8 24.2 -
EBITDA EURm 505.1 495.4 2.0%
EBITDA margin % 27.0 31.3 -
Group result EURm 176.3 210.3 - 16.2%
Earnings per share EUR 0.51 0.68 - 25.6%
Cash flow from operating
activities EURm 491.7 420.9 16.8%
Gearing % 103.4 96.8 -

The Group succeeded in increasing its operating result in quarters
1-2/2011, despite the far below-average water supply in quarter 2/2011. At
0.86, the hydro coefficient in the first half of 2011 was 14% below the
long-term average (6 percentage points below the previous year's level).
This had a negative impact of EUR82.5m on the operating result. Generation
from annual storage power plants was also below the previous year's level.
Thus, VERBUND's own generation from hydropower fell 6.0% year-on-year to
11,752 GWh. In contrast, generation from thermal power rose 34.1%
year-on-year to 2,454 GWh. Overall, VERBUND's own generation decreased by
slightly less than 1%.

The Group result was impacted in particular by the negative result from
equity interests. Foreign exchange losses from the measurement of
liabilities denominated in foreign currency on the part of the Turkish
joint venture, the lack of positive effects on earnings from tax benefits
for investments at the Italian company Sorgenia Holding S.p.A. (Group) and
the difficult market situation as well as restructuring at the French
company POWEO S.A. (Group) and its subsidiaries resulted in a significant
decrease in the contribution to the result of foreign equity interests.

European wholesale prices rose following the nuclear crisis in Japan and
the German moratorium on nuclear power. VERBUND sells the majority of its
annual own generation one year in advance as part of its hedging strategy.
Thus, the development of wholesale prices is not directly reflected in the
2011 half-year result, but rather in the 2012 results.

Gradual pullout from the French market
In July VERBUND signed agreements to sell the French renewables portfolio.
The closing is expected in the second half of 2011.

Interest in power plants on the Inn River sold
The sale of shares of the Bavarian power plants on the Inn River, which had
already been announced at the time of acquisition, was completed at the
beginning of July 2011. The Austrian energy providers WIEN ENERGIE and EVN
together now hold a 26% interest. VERBUND's original acquisition price plus
a reasonable interest rate was agreed as the purchase price.

Outlook on the full year
Assuming an average supply of water in the second half of 2011, we expect
our operating result as well as the Group result for 2011 to remain at
nearly the same level as in the previous year. Dividends will be oriented
on a payout ratio of 45% to 50%.

Please find further information and the half year report 2011 on
www.verbund.com

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.com

27.07.2011 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
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Language: English
Company: VERBUND AG
Am Hof 6A
1010 Wien
Austria
Phone: 0043-1-53113-52616
Fax: 0043-1-53113-52694
E-mail: investor@verbund.com
Internet: www.verbund.com
ISIN: AT0000746409
WKN: 877738
Indices: ATX
Listed: Regulierter Markt in Frankfurt (General Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart; Wien (Amtlicher Handel / Official Market)

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