VERBUND AG — Earnings Release 2014

Jul 10, 2014

News Details

Ad-hoc | 10 July 2014 10:29

VERBUND AG: Adjustment of earnings forecast for 2014

VERBUND AG / Key word(s): Results Forecast/Forecast

10.07.2014 10:29

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

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Today, the management of VERBUND AG announced the adjustment of the
earnings forecast for financial year 2014. Based on the updated forecast,
VERBUND will generate EBITDA of around EUR690m (previous forecast: EUR850m)
and a Group result of around EUR70m (previous forecast: EUR150m). The
planned dividend still focuses on a payout ratio of approximately 50% of
the adjusted Group result. The 2014 adjusted Group result will amount to
approximately EUR150m.

This adjustment of the earnings forecast can be attributed to the following
reasons:

• Low water supply

The water supply of 93% was significantly below the long-term average in
the first half of 2014, and as a result, the planning assumptions for an
average water supply for the full year 2014 could not be maintained. The
negative effect of the low water supply amounts to EUR29m in EBITDA and
EUR16m in the Group result. An average water supply is assumed for the
remainder of 2014.

• Difficult market environment

The persistently difficult market environment and continued pressure on the
European wholesale prices are having a more negative impact on earnings
than planned. Excess electricity volumes therefore have to be sold at lower
spot market prices. In addition, preliminary project costs for a wind farm
in Romania and part of the net investment in the Albanian company Energji
Ashta were written off. These effects have an adverse effect of EUR45m on
EBITDA and EUR41m on the Group result.

• Effects related to the resolutions for decommissioning of thermal power
  plants

On 14 May 2014, VERBUND resolved to temporarily decommission the Mellach,
Pont-sur-Sambre and Toul combined cycle gas turbine power plants and to
close the Dürnrohr hard coal power plant as well as the Neudorf/Werndorf II
oil-fired district heating plant. There are expenses associated with the
temporary or final closure of the power plants and the remeasurements of
the temporarily decommissioned thermal power plants. In total, these
effects have an adverse effect of EUR118m on EBITDA and EUR36m on the Group
result.

• Reduction in expenses

Adjustments to the equity interest portfolio initiated by VERBUND along
with additional ongoing measures to reduce expenses associated with the
implementation of the cost-cutting programme and the continued focus on
investments serve to improve the result.

The adjustment of the earnings forecast is the result of a non-functioning
pan-European electricity market characterised by massive regulatory
intervention. The heavy oversubsidisation of new renewable energy sources,
a non-functioning CO2 market and massive excess capacities in electricity
generation are exerting enormous pressure on the profitability of European
utilities. VERBUND is counteracting this trend with the restructuring in
the area of the thermal power plants, cost-cutting programmes and a focus
on the investment programme. In addition the company expands its portfolio
with energy related services and solutions.

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

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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: Wien (Amtlicher Handel / Official Market)

End of Announcement DGAP News-Service

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