Business development satisfactory in the third quarter

Karlsruhe. EnBW Energie Baden-Württemberg AG closed the third quarter with what again was a satisfactory business performance overall. The noticeable recovery of the general economy and associated increase in demand for energy also had a positive effect on the quarterly results. In the period from January to September 2010, unit sales of electricity in the EnBW group increased by 23.1 per cent compared to the prior year to 109.9 billion kilowatt-hours. This growth is due above all to the higher volume of electricity traded. In this area, EnBW also benefited from the power station capacity acquired in Germany in recent months. In contrast, unit sales to retail and business customers fell by 3.9 billion kilowatt-hours to 50.4 billion kilowatt-hours. Half of this drop is due to the sale of GESO Beteiligungs- und Beratungs-AG. The sale also had an effect on unit sales of gas, as did keener competition. While gas sales to retail customers in the reporting period reached the prior-year level of 8.2 billion kilowatt-hours, unit sales of gas to business customers fell by 21.3 per cent to 29.5 billion kilowatt-hours.
Owing to significantly increased unit sales, EnBW generated external revenue of € 12,950.1 million. This represents an increase of 10.7 per cent compared to the prior-year period. The electricity generation and trading segment was the revenue driver here. In the first nine months of this year, EnBW generated revenue of € 3,554.8 million in this segment. In the comparative prior-year period, revenue had totalled € 1,847.9 million. This sharp rise in revenue is essentially attributable to EnBW’s higher generation capacities and increased trading activity. In its electricity grid and sales segment, EnBW achieved revenue of € 7,618.5 million (+ 2 per cent). In the gas segment, however, revenue fell by 32 per cent to € 1,258.9 million. In the energy and environmental services segment, revenue fell by 3 per cent to € 517.9 million.
EnBW’s earnings development in the reporting period was also characterised by extraordinary effects. These include the sale of GESO Beteiligungs- und Beratungs-AG and its subsidiaries, a compensation claim on account of the premature termination of a long-term electricity supply agreement and impairment losses recognised on the goodwill of the joint venture in Turkey and the generation facilities of Stadtwerke Düsseldorf. After eliminating these extraordinary effects, adjusted EBIT generated in the first nine months of this year came to € 1,614.0 million, up 15.1 per cent.

Adjusted EBIT in the electricity generation and trading segment rose by 8.1 per cent to € 1,300.6 million. One of the factors boosting earnings was, in particular, the better terms and conditions arising from the forward contracts concluded for electricity generation in the fiscal year 2010. At € 282.6 million, adjusted EBIT in the electricity grid and sales segment more than doubled. The main reasons here were the rise in the volume of electricity transmitted and higher revenue from network user charges. At € 48.4 million, adjusted EBIT in the gas segment remained significantly below the prior-year results on account of increased competition. Despite the decrease in revenue in the energy and environmental services segment, adjusted EBIT increased in this segment by 18.3 per cent to € 93.3 million.

Adjusted group net profit – in terms of the profit shares attributable to the equity holders of EnBW AG – increased by 26.0 per cent on the prior-year period, and now comes to € 903.6 million. At € 1,245.4 million, group net profit, which also contains extraordinary effects, is 74.7 per cent above the prior-year level. Besides the satisfactory development of operations, the non-operating result on balance contains considerable positive effects from the sale of GESO Beteiligungs- und Beratungs-AG and its subsidiaries and from the increase in the shareholding in Pražská energetika a. s. Non-operating EBIT in the first nine months of 2010 totalled € 296.3 million. The comparative prior-year figure was € 16.7 million.

Hans-Peter Villis, CEO of EnBW: “The result generated in the first nine months of 2010 is satisfactory, but cannot disguise the fact that we will face considerable additional costs in the next few years. These additional costs are due among other things to the planned nuclear fuel rod tax and the prepayments into the fund for the promotion of renewable energies in connection with the extension of working life of the nuclear power plants.”

The nuclear fuel rod tax will involve annual payments for EnBW of around € 440 million over a period of six years. The prepayments to the fund for the promotion of renewable energies will amount to € 65 million for each of the next two years and to € 43 million per year in the four years thereafter. Further additional costs are attributable to the changing market environment on account of falling wholesale market prices as well as the auctioning of all CO2 allocations planned as of 2013.

“These are incisive cuts, and they mark a turning point. But since we can spend every euro only once, we now have to adjust our investment programme. In view of these exogenous cuts, we have also launched a group-wide programme to sustainably secure earnings,” says Villis.