Verbund Annual Report 2008
Verbund once again increases results in 2008 considerably
Verbund, Austria's leading electricity company, once again generated a very positive result in the year under review due to its strong orientation around energy production from sustainable hydropower. In a difficult market environment, Verbund was able to increase sales by 23.2 % to 3,744.7 million euro, improve the operating result by 24.3 % to 1,138.6 million euro, and raise the Group result by 18.6 % to 686.6 million euro. The Managing Board will propose a dividend increase of 16.7 % to 1.05 euro/share to the General Meeting.
Today, Wednesday, during the Verbund annual results press conference, Verbund CEO Wolfgang Anzengruber commented: "By having a very good result once again in 2008, which was achieved in an economic environment that is generally becoming more and more difficult, we have created a basis for a successful fiscal year in 2009. We are well positioned strategically and we operate flexibly and forward-looking at the same time. For example, we have already sold more than two-thirds of our own generation for the ongoing year in advance for still good prices."
The EBIT margin increased from 30.2 % to 30.4 %; gearing worsened slightly from 70.0 % to 80.2 %; the operating cash flow was increased from 807.6 million euro to 934.2 million euro. The Economic Value Added (EVA), the control-specific key ratio for the Verbund Group for value creation, was at a stable value of 440.8 million euro in fiscal year 2008 in spite of an increase to the capital costs.
Higher sales prices achieved in the European electricity markets
Verbund was able to considerably increase its sales prices recently in the European electricity markets. The average contract price that was achieved was 63.34 euro/MWh (2007: 53.15). As of December 31, 2008, 68 % of its own generation for 2009 had already been sold for an average of 70.28 euro/MWh.
Group generation increased by 1.2 %
At 28,660 GWh, total generation of the group was 1.2 % higher than last year’s level. Generation from local hydropower was 88 %. This is primarily attributable to the good water supply in the local rivers. On the whole, electricity from hydropower increased by 987 GWh to 25,308 GWh.
Highest-rated company on the Viennese Stock Exchange
The Verbund share was not able to evade the extremely negative stock market environment. Therefore, it closed 2008 with a negative performance of 32.0 %, but it developed considerably better than the Viennese ATX (-61.2%).
Based on market capitalisation, the Verbund Group was the highest rated company on the Viennese Stock Exchange over the entire year of 2008. Effective December 22, 2008, the Verbund share was included in the "ATX five".
Investment power secured in spite of financial market crisis
Verbund was only burdened with minor negative effects for the year 2008 from the financial market crisis and the resulting crisis of the real economy. The generation structure, the good profit situation of the past few years and excellent positioning in the European energy sector have made it possible for the Group to continue its value-generating course of investments.
This was made easier by the high internal financing power and by Verbund's good liquidity, which was promoted by good development of the results, the increasing cash flow and the strong rating.
In the planned expansion, Verbund wants to primarily concentrate on the implementation and development of projects that are under construction or alternatively have been approved. New projects will be realised based on strict value-generating criteria.
Constant result is the aim for 2009
In 2009, Verbund is aiming to achieve results that are similar to those in 2008 even with the continued difficult general conditions, and also assuming an average water supply. Furthermore, Verbund wants to keep the dividend policy based on a pay-out ratio of approx. 45 %.
Group CEO Anzengruber plans to invest in domestic hydropower
"We want to make an important contribution to defusing the current economic and mood crisis," the new Verbund CEO, Wolfgang Anzengruber, stated today, Wednesday, during the company's annual results press conference in Vienna.
"We can - if the general conditions fit - immediately invest in the expansion of local hydropower and that way secure jobs or alternatively create new ones. If we take advantage of this historical opportunity, we will make a major stride further into a better energy future that is more secure, independent, environmentally sound and more social."
Verbund has been making massive investments in Austria for several years now. The focus has been on hydropower. There was rapid construction in 2008 as well: The Limberg II pumped storage power plant with a capacity of 480 megawatts (MW) is many months ahead of schedule. Renewal of the machinery at the Aschach Danube power plant is continuing. And, the new Salzach power plant in Werfen/Pfarrwerfen is already supplying its first electricity.
It isn't possible to secure Austria's power requirements in the medium term without thermal power. Therefore, Verbund is also investing in the generation of electricity from natural gas, which is less of a burden on the environment than oil or coal. The ground-breaking ceremony for the Mellach bei Graz gas power plant (832 MW), which is to be commissioned in 2011, took place on October 30, 2008.
In the grid sector, work on the 380 kV extra-high voltage line in Styria is making rapid progress with completion scheduled for mid 2009. Start of construction of the "Salzach neu-St. Peter" section of the planned 380 kV Salzburg line is planned for mid 2009 and start-up is slated for the end of 2010/beginning of 2011. Verbund is also planning on the erection of the "Tauern-Salzach new" segment as an overhead power line.
Successes in the area of "new" renewable energies
By buying three wind parks in Lower Austria with a total capacity of 49 MW, Verbund has made major strides in Austria in the area of "new" renewable energies. More wind turbine projects are currently being planned for Croatia, Rumania and Bulgaria. Likewise, the two photovoltaic power plants that Verbund acquired in Spain with a total capacity of 3 MW went online in 2008.
Expansion of international business activities
Verbund's joint ventures in Italy, France, and Turkey are also developing very positively. In Italy, Verbund together with its partner CIR - following the first step in 2008 - will increase its share in the common joint venture Sorgenia this year as well up to 44 %. In Turkey, Verbund together with its Turkish partner Sabanci-Holding, bought the previously state-run power supplier Baskent EDAS with 3 million customers at an auction. In France, the thermal power plant Pont sur Sambre (412 MW) is scheduled for start-up in mid 2009. In Albania, Verbund will build the 48 megawatt hydropower plant Ashta on the Drin River close to the city of Shkoder.