EVN AG
EVN AG: Development of business in the first half-year of 2007/08
EVN AG / Half Year Results/Half Year Results Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. ---------------------------------------------------------------------- Development of business in the first half-year of 2007/08 (October 1, 2007 – March 31, 2008) > Weather-related increase in Energy segment sales volumes and revenue > Acquisition of a 49% shareholding in the district heating company Fernwärme St. Pölten GmbH > Foreign expansion of Rohöl-Aufsuchungs AG > Contract to construct a sodium hypochlorite production facility for the City of Moscow > Capital increase from the company’s non-appropriated capital reserves, stock split by a ratio of 4 for 1 effective April 17, 2008 2007/08 HY.1 Change EUR m in % Revenue 1,365.0 + 9.0 EBITDA 262.0 + 2.3 Results from operating activities (EBIT) 170.6 - 0.7 Group net profit 187.4 - 0.8 The business environment in the energy sector in the period October 2007 – March 2008 was characterised by lower temperatures compared to the comparison period of the previous year, increasing wholesale electricity and primary energy prices, strong economic growth in Austria, as well as a continuation of the very dynamic economic expansion in South East Europe. In the 1st half of the 2007/08 financial year, EVN increased its total revenue by 9.0%, to EUR 1,365.0m. The colder temperatures led to a revenue increase in the Energy segment, whereas revenue in the Environmental Services segment declined, as expected. The results from operating activities (EBIT) amounted to EUR 170.6m, or 0.7% below the previous year’s level, the Group net profit fell 0.8%, to EUR 187.4m. Considerable progress within the framework of the energy concept for the Lower Austrian Central Region On January 11, 2008 Europe’s largest district heat store in Theiß was put into operation, moreover the district heating project in cooperation with the Lower Austrian capital of St. Pölten was successfully continued. Following the formal approval granted by Austria’s antitrust authorities, the district heating operations of the City of St. Pölten were spun off from the municipal utility to a newly-established company, in which EVN acquired a 49% shareholding, and which was included at equity as of the 2nd quarter of 2007/08. In April 2008, we opened the biomass pilot plant in Dürnrohr, which is designed to increase the share of energy generated by renewable energy sources, and further diversify EVN’s energy mix. The ground-breaking ceremony for constructing the district heating pipeline from Dürnrohr to St. Pölten took place on May 20, 2008. Foreign expansion of Rohöl-Aufsuchungs AG Rohöl-Aufsuchungs AG, Vienna, in which EVN has a majority shareholding of 50.03%, is expanding abroad and will cooperate with the Ukrainian state-owned enterprises 'Crimgeologiya' and 'Transeuro Energy' within the context of a joint venture to exploit natural gas fields in the Crimea. The joint development of four gas fields has already been contractually concluded. Further exploration projects are being negotiated. New projects in Environmental Services segment In the 2nd quarter 2007/08, WTE was awarded a contract for two construction projects in Moscow. On the one hand, a sodium hypochlorite production facility will be built, designed to replace the chlorine gas used in drinking water purification. The project, with a total investment volume of EUR 178m, is being implemented within the context of a BOOT model, including operation of the plant over a period of ten years. On the other hand, WTE will also construct a second combined cycle heat and power plant, including an integrated sludge dewatering facility. Biogas derived from the sludge of the wastewater treatment facility, one of the largest in the world, will provide the main energy source for the power plant located in Ljuberzy south of Moscow. WTE will be responsible for operating the biogas plant for a period of 15 years. 1st Half-Year 2007/08: Increase in Energy segment sales volumes and revenue and project-related decline in Environmental Services segment revenue In the 1st half-year 2007/08, the EVN Group raised its total revenue by 9.0%, to EUR 1,365,0m. The external revenue of the Energy segment rose 12.7%, to EUR 1.276.5m. During the period under review, total revenue in the Environmental Services segment declined by EUR 30.8m, to EUR 75.8m. The completion of the large waste incineration facility in Moscow was only partially offset by the start of various new smaller projects As a consequence of the increase in the item Electricity purchases and primary energy expenses, which can be attributed to increased sales volumes and strong price rises for primary energy in the Energy segment, along with higher personnel expenses and higher depreciation and amortisation, as well as increased expenses in South East Europe, the results from operating activities (EBIT) amounted to EUR 170.6m, or 0.7% below the previous year’s level. The EBIT margin declined year-on-year from 13.7% to 12.5%. The financial results of the EVN Group in the 1st half of the 2007/08 financial year declined significantly, posting a 17.0% decrease, or EUR 12.7m, to EUR 61.9m. Whereas income from investments from associates remained more or less stable, at EUR 94.0m, interest and other financial result declined by EUR 11.4m. Higher interest income from non-current financial assets, related to leasing payments for the large projects in Moscow in the Environmental Services segment, could not compensate for the negative effects of share price losses resulting from the crisis on global financial markets. As a consequence of these developments, the profit before income tax in the 1st half-year 2007/08 amounted to EUR 232.5m, a decline of 5.7% compared to the previous year. In contrast, despite higher minority interest, the Group net profit only fell by 0.8%, or EUR 1.4m, to EUR 187.4m, which can be attributed to a decrease in income tax expense. Since the last balance sheet date on September 30, 2007, the balance sheet total of the EVN Group rose by 6.7, to EUR 6,679.1m. Equity climbed by 9.5%, to EUR 3,300.3m, which in turn led to an increase in the equity ratio from 48.1% as of September 30, 2007 to 49.4%. Taking account of the total net debt amounting to EUR 1,092.7m, the gearing of the EVN Group amounted to 33.1%, which continues to be well below the energy sector average. Outlook Based on the developments in the 1st half of the 2007/08 financial year, it will hardly be possible to match the record performance achieved in the previous year. The strong price rises for primary energy will put further downward pressure on margins in the Energy segment. Moreover, we expect a less frequent use of thermal power stations. Several new projects in the Environmental Services segment will first get underway in the 2nd half of 2007/08, consequently the profit contribution of this segment is expected to be lower than in the preceding financial year. The complete Letter to Shareholders HY. 1 2007/08 is available at http://www.investor.evn.at. EVN AG Corporate Communications EVN Group Stefan Zach EVN Platz 2344 Maria Enzersdorf Tel.: +43 2236 200-122 94 Fax: +43 2236 200-822 94 Mobil: +43 676 810 32 2294 stefan.zach@evn.at www.evn.at 29.05.2008 Financial News transmitted by DGAP ---------------------------------------------------------------------- Language: English Issuer: EVN AG EVN Platz 2344 Maria Enzersdorf Österreich Phone: +43-2236-200-12294 Fax: +43-2236-200-82294 E-mail: info@evn.at Internet: www.evn.at ISIN: DE0002494200, AT0000741053 WKN: 249420, 878279 Listed: Regulierter Markt in Frankfurt (General Standard); Freiverkehr in Berlin, Stuttgart, München End of News DGAP News-Service ---------------------------------------------------------------------------
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