DGAP-News: EVN AG / Key word(s): Half Year Results
2015-05-28 / 08:00

---------------------------------------------------------------------
Business development in the first half year of 2014/15 (1 October 2014 - 31 March 2015)

Highlights

* Significant increase in electricity production
* Sale of the sodium hypochlorite plant to the water supply and waste water disposal company of the city of Moscow
* Operating result above prior year; stable Group net result * EUR 1 billion investment plan to support supply security in Lower Austria and the expansion of renewable energies over four years already in the implementation phase
* Reduction in the energy price for electricity at the beginning of the 2014/15 financial year; start of the EVN Bonus World on 1 April 2015 * Outlook 2014/15: Group net result expected to exceed the 2012/13 level
Key figures

* Revenue: +6.5% to EUR 1,224.7m
* EBITDA: +18.1% to EUR 384.0m
* EBIT: +19.5% to EUR 237.5m
* Financial result: EUR -31.4m to EUR -22.0m 
* Group net result: -0.5% to EUR 165.4m
* Net debt: EUR 1,359.4m (30.09.2014: EUR 1,622.4m)
Energy sector environment

The first half of the 2014/15 financial year in Austria was characterised by average temperatures that were nearly identical to the previous year and, therefore, also above the long-term average. As a result, the heating degree total remained unchanged at a low level. In contrast, lower temperatures in South Eastern Europe led to a 12.3% increase in the heating degree total in Bulgaria and 9.0% in Macedonia.

The continuing expansion of renewable energy generation capacity in Austria and Germany as well as the low price of coal and - despite the recent increase - the still low price for CO2 emission certificates led to a further drop in the forward and spot market prices for base load and peak load electricity during the first six months of 2014/15. The forward prices applicable to the reporting period fell by 12.0% to EUR 38.0 per MWh for base load electricity and by 11.9% to EUR 49.1 per MWh for peak load electricity. In comparison with the first six months of 2013/14, the spot market prices declined 8.2% to EUR 33.5 per MWh for base load electricity and by 11.0% to EUR 43.5 per MWh for peak load electricity.
Substantial increase in EBIT; Group net result nearly at prior year level The EVN Group generated revenue of EUR 1,224.7m in the first half of 2014/15, which represents an increase of EUR 74.2m, or 6.5%, over the comparable prior year period. Revenue development was positively influenced, above all, by an increase of 32.9% in the company's own electricity generation, increased natural gas marketing activities and recent tariff decisions in Bulgaria and Macedonia. In addition, the Theiss and Korneuburg power plants were called on more frequently by the Austrian and German transmission network operators to ensure network stability.
Other operating income rose by EUR 25.1m to EUR 66.6m, among others due to the sale of the sodium hypochlorite plant. The 5.9% increase in the cost of electricity purchases from third parties and primary energy expenses to EUR 638.3m was related to the increase in electricity generation through full operations at the Duisburg-Walsum power plant, the use of natural gas volumes for trading purposes and higher energy procurement costs in Bulgaria due to recent tariff decisions. The cost of materials and services rose by 14.8% to EUR 126.6 m, primarily due to an impairment loss EUR 11.0m which was recognised to remaining components from the former thermal waste utilisation plant no. 1 in Moscow. This measure involves the flue gas cleaning aggregate, which was adapted to meet the particular requirements of the city of Moscow and, based on recent market information, cannot be used for another purpose.

Slightly higher personnel expenses, lower other operating expenses and an increase in the share of results from equity accounted investees with operational nature led to an increase of 18.1% in EBITDA to EUR 384.0m.
In addition to an investment-related increase in scheduled depreciation and amortisation, impairment losses of EUR 19.0m were recognised during the reporting period. The impairment losses resulted, above all, from the closing of a Verbund power plant unit at the Dürnrohr joint power plant in April 2015 and the related expectations of higher maintenance and operating costs in the future. Based on these developments, the results from operating activities (EBIT) totalled EUR 237.5m, for a year-on-year increase of EUR 38.8m or 19.5%.

Financial results amounted to EUR -22.0m and were EUR 31.4m lower than in the previous year. This change resulted from a reduced dividend from Verbund AG for the 2014 financial year, the termination of the hedge for the financing of the sold sodium hypochlorite plant in Moscow and the costs for the related investment guarantee from the Federal Republic of Germany. After the deduction of income tax, which remained unchanged in year-on-year comparison, and the share of result attributable to non-controlling interests, Group net result equalled EUR 165.4m and was 0.5% below the previous year.

Reduced net debt; solid balance sheet structure 

Gross cash flow rose by EUR 5.3m to EUR 305.7m in the first half of 2014/15, chiefly due to the increase in the result before income tax. The decline of EUR 141.0m in cash flow from operating activities to EUR 209.4m resulted from changes in working capital, whereby the prior year was influenced by non-recurring effects. Cash flow from investing activities was positive and amounted to EUR 95.5m, which reflected the influence from the sale of the sodium hypochlorite plant. Part of the proceeds were invested in short-term securities. Cash flow from financing activities equalled EUR -300.4m for the reporting period, compared with EUR -216.8m in the first half of the previous year. This development reflected the repayment of the financing for the sodium hypochlorite plant and the scheduled repayment of financial liabilities. Also included here is the payment of the dividend in January 2015 for the 2013/14 financial year.
Net debt declined EUR 263.0m below the level on 30 September 2014 to EUR 1,359.4m as of 31 March 2015, and gearing fell to 50.5% (30 September 2014: 61.6%). Equity increased by EUR 61.0m, or 2.3%, to EUR 2,693.7m. The equity ratio equalled 40.3% as of 31 March 2015 (30 September 2014: 38.5%).
Developments in the energy and project business

Energy business

Over four years EVN will invest approximately EUR 1 billion in the networks, renewable energy and water supplies in Lower Austria. This not only highlights the company's clear focus on ensuring supply security for its customers, but also underscores its local presence in the home market.
In the area of windpower, the Prottes-Ollersdorf wind park with twelve wind turbines and a generation capacity of 37 MW was commissioned during the reporting period. That gives EVN 250 MW of windpower generation capacity to supply 150,000 households with environmentally friendly electricity. In hydropower generation, the completion of revitalisation work on the Mühlhof hydropower plant in March showed the focus in this field of operation.  
As of 1 January 2015, the regulated network tariffs in Lower Austria were reduced by roughly 1% for electricity and roughly 3% for natural gas. The energy price for electricity was previously reduced as of 1 October 2014 within the framework of the EnergieAllianz. This lowered the energy price by 10% for an average household in Lower Austria with power consumption of 3,500 kWh per year.

Environmental business

EVN's environmental services business is currently working on eight international projects. The transfer of the sodium hypochlorite plant in Moscow was successfully finalised in March 2015. As indicated in the report on the first quarter, this plant was sold to Mosvodokanal, the water supply and waste water disposal company of the city of Moscow. The successful completion of a 72-hour test demonstrated the fulfilment of all quality and volume requirements and completed the commissioning process which, in turn, terminated EVN's guarantee for the functionality of the plant.
Water supplies in Lower Austria were further improved by the commissioning of a new natural filter plant in Drösing, which reduces the hardness of the water for the region's customers by natural means. Construction is also proceeding on a further natural filter plant in Obersiebenbrunn, and the permit required by the Austrian Water Act was received for the natural filter plant in Zwentendorf an der Zaya. The completion of these three plants will significantly improve the water quality for nearly 200,000 residents in the Weinviertel and Marchfeld regions. In addition, EVN took over the management and operation of the water supply network in the community of Paudorf as of 1 January 2015.

 
Outlook

The stable developments during the first six months lead us to confirm our outlook for the 2014/15 financial year, with Group net result that is expected to exceed 2012/13. The assumptions for energy sector developments over the remaining six months are based on long-term averages, and actual developments cannot be predicted with certainty. Group results could be significantly influenced by regulatory conditions, developments in the proceedings related to claims from the tariff decisions in Bulgaria and in connection with the Duisburg-Walsum power plant as well as the progress of the activities in Moscow.

For the complete Letter to Shareholders for the first half year of 2014/15 see www.investor.evn.at.



---------------------------------------------------------------------
2015-05-28 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------

Language: English Company: EVN AG EVN Platz 2344 Maria Enzersdorf Austria Phone: +43-2236-200-12294 Fax: +43-2236-200-82294 E-mail: info@evn.at Internet: www.evn.at ISIN: AT0000741053 WKN: 074105 Indices: ATX Listed: Foreign Exchange(s) Wien (Amtlicher Handel / Official Market)  
 
End of News    DGAP News-Service  
--------------------------------------------------------------------- 362349 2015-05-28