EQS-News: EVN AG / Key word(s): Interim Report/Quarter Results
EVN AG: Business development in the first three quarters of 2021/22

25.08.2022 / 07:30
The issuer is solely responsible for the content of this announcement.

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Highlights

• Historic distortions on the international energy markets
• Decline in EBITDA and EBIT; different effects on the diversified
business areas
• Pressure on earnings in energy supply due to higher procurement costs
• EVN Climate Initiative:

• EVN’s contribution to reach the “well below 2°C goal” set by the
Paris Climate Agreement
• Increase in investments in the energy future (focus on renewable
generation, network infrastructure and drinking water supplies in
Lower Austria) to ensure supply security
• Wind power and photovoltaic projects with a total of roughly 90
MW currently under realisation in Lower Austria

• Issue of a registered bond (EUR 155m) and a promissory note loan (EUR
157m)

 

Key results

• EBITDA: –11.8% to EUR 578.1m
• EBIT: –0.6% to EUR 290.2m
• Group net result: +1.7% to EUR 228.4m
• Net debt: EUR 1,053.4m (30 September 2021: EUR 813.8m)

 

 

Energy sector environment

In the first three quarters of 2021/22, the heating degree total – which
defines the temperature-related demand for energy – was above the
long-term average in EVN’s three core markets. In Bulgaria and North
Macedonia the heating degree total even exceeded the previous year.
Growing economic recovery after Covid-19 as well as the war in Ukraine led
to a massive increase in prices for primary energy carriers and CO[2]
certificates in the reporting period. Wholesale prices for energy and
energy carriers are at all-time highs since summer 2021; yet there are no
signs of a turnaround in sight. This development is intensified by the
geopolitical environment and the resulting influence on inflation. The
spot market prices for base load and peak load electricity averaged EUR
207.2 per MWh and EUR 239.9 per MWh, respectively, and were a multiple of
the comparable prior year values of EUR 53.1 per MWh and EUR 62.7 per MWh.

 

EBITDA and EBIT below previous year

Revenue recorded by the EVN Group rose by 64.6% to EUR 2,943.7m in the
first three quarters of 2021/22 and was driven by a number of individual
effects. In South East Europe, the sharp rise in electricity prices led to
double-digit growth in the energy business. In Austria, the network tariff
set by E-Control as of 1 January 2021 and 1 January 2022 had a positive
influence on network revenue. Other important impulses were provided by
volume and price effects from renewable electricity generation, price
adjustments by EVN Wärme, higher revenue from natural gas trading and
positive valuation effects from hedges. In addition, an increase in the
use of the Theiss power plant by the Austrian transmission network
operator for network stabilisation offset the absence of revenue from the
Walsum 10 power plant following the sale of EVN’s investment and the
termination of electricity purchases from this source. Growth was also
recorded in the international project business.

Other operating income fell by 56.7% year-on-year to EUR 86.3m, chiefly
due to the absence of a positive non-recurring effect from the previous
year which resulted from the takeover of an additional electricity
procurement right.

The distortions on energy markets were reflected in a sharp rise in the
cost of electricity purchases from third parties and primary energy
expenses to EUR 1,702.7m (previous year: EUR 776.0m). The main factors
here included a massive increase in energy procurement costs in South East
Europe corresponding to the growth in revenue as well as higher primary
energy costs for the above-mentioned more frequent use of the Theiss power
plant and higher procurement costs for EVN Wärme. The cost of materials
and services rose by 33.2% to EUR 478.5m in line with revenue growth in
the international project business.

Personnel expenses were 1.8% higher year-on-year at EUR 276.2m due to
adjustments required by collective bargaining agreements. The average
number of employees increased slightly to 7,142 (previous year: 7,133
employees).

Above all, higher receivables write-offs in North Macedonia led to an
increase of 17.6% in other operating expenses to EUR 95.1m. The share of
results from equity accounted investees with operational nature fell by
35.1% to EUR 100.7m, whereby most of this decline is attributable to
higher procurement costs for electricity and natural gas at EVN KG in
Austria. In the previous year, this position also included a revaluation
of EUR 9.6m to the Ashta hydropower plant in Albania. The higher demand
for natural gas storage led to an increase in the earnings contribution
from RAG.

Based on these developments, EBITDA recorded by the EVN Group fell by
11.8% year-on-year to EUR 578.1m in the first three quarters of 2021/22.
Scheduled depreciation and amortisation, including the effects of
impairment testing, declined to EUR –51.2m (previous year: EUR –111.6m),
chiefly due to effects from impairment testing. In the second quarter of
2021/22, a change in the Group’s risk and earnings expectations for future
projects based on the global distortions had already led to the
recognition of an impairment loss to goodwill in the international project
business (EUR 52.9m) and to the residual carrying amount of the two
sludge-fired combined heat and power plants in Moscow (EUR 4.4m). These
impairment losses were contrasted by a revaluation of EUR 6.4m to the
Kavarna wind park in Bulgaria during the first quarter of 2021/22 to
reflect the changed regulatory conditions in combination with an increase
in electricity prices. In the previous year, the takeover of an additional
electricity procurement right resulted in the recognition of impairment
losses totalling EUR 113.1m. In total, EBIT declined by 0.6% to EUR
290.2m.

Financial results totalled EUR 4.8m in the first three quarters of 2021/22
(previous year: EUR 2.8m). An increase in the dividend from Verbund AG to
EUR 1.05 per share for the 2021 financial year (previous year: EUR 0.75
per share) and a decline in interest expenses following the scheduled
redemption of a bond due in April 2022 (nominal value: EUR 300m) were
contrasted by weaker performance of the R138 fund in the current market
environment and negative foreign exchange developments. The result before
tax remained nearly unchanged at EUR 294.9m (previous year: EUR 294.8m).
After the deduction of EUR 47.2m (previous year: EUR 46.8m) in income tax
expense and the earnings attributable to non-controlling interests, Group
net result for the period equalled EUR 228.4m. This represents a slight
year-on-year increase by 1.7%.

 

Solid balance sheet structure

EVN has a solid and stable capital structure which will provide a good
foundation over the coming years for the realisation of the extensive
investment programme in the areas of network infrastructure, renewable
generation and drinking water supplies. Net debt totalled EUR 1,053.4m as
of 30 June 2022. As refinancing for the bond redeemed in April 2022
(nominal value: EUR 300m) two new issues were place: a registered bond
(nominal value: EUR 155m) in April 2022 and a promissory note loan
(nominal value: EUR 157m) in July 2022. Terms of tranches vary between
five and 16 years.

 

Energy. Water. Life. – Developments in the energy and environmental
services business

Energy business

EVN’s electricity generation declined by 5.2% to 2,763 GWh in the first
three quarters of 2021/22. Renewable generation equalled 1,744 GWh
(previous year: 1,746 GWh) and represented 64.2% of the total (previous
year: 59.9%). Above-average wind flows offset the decline in water flows.
Electricity generation in the thermal power plants declined by 15.5% to
989 GWh due to the sale of the 49% investment in the Walsum 10 power plant
as of 30 September 2021. This was, however, offset in part by the
increased use of the Theiss power plant for network stabilisation.

In line with the goals for expansion of renewable energy as part of EVN’s
strategy 2030, there are currently wind power and photovoltaic projects
with a total of roughly 90 MW under realisation in Lower Austria. New
construction of the windparks in Schildberg and Palterndorf-Dobermannsdorf
as well as the repowering of the existing equipment in Japons are under
realisation. For the windpark Grosskrut-Altlichtenwarth as well as the
photovoltaic plant in Trumau construction preparations have started.

Environmental and water business

The improvement of supply security and drinking water quality in Lower
Austria represents a further focal point of EVN’s investments. Since March
2022 full commercial operations have started in Petronell at the already
fifth natural filter plant of EVN. Numerous further transport pipelines
are in planning and under construction.

In the international project business, commercial commissioning of the
thermal sewage sludge treatment plant, which was built by the 50:50 joint
venture sludge2energy in Halle-Lochau, Germany took place in April 2022.

As of 30 June 2022, WTE Wassertechnik GmbH had twelve projects for
wastewater, drinking water and thermal sewage sludge treatment under
planning and construction in Germany, Poland, Lithuania, Romania, Bahrain
and Kuwait as well as two further thermal sludge utilisation projects in
progress in Germany (Hanover und Straubing) through the joint venture with
sludge2energy.

 

Outlook confirmed for the 2021/22 financial year

EVN expects Group net result of approximately EUR 200 to 240m for the
2021/22 financial year.

 

The Letter to Shareholders on the first three quarters of 2021/22 is
available under www.investor.evn.at.

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25.08.2022 This Corporate News was distributed by EQS Group AG.
www.eqs.com

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Language: English
Company: EVN AG
EVN Platz
2344 Maria Enzersdorf
Austria
Phone: +43-2236-200-12294
E-mail: info@evn.at
Internet: www.evn.at
ISIN: AT0000741053
WKN: 074105
Indices: ATX
Listed: Vienna Stock Exchange (Official Market)
EQS News ID: 1427397

 
End of News EQS News Service

1427397  25.08.2022 



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