DGAP-News: EVN AG: Development of business in the first

EVN AG / Quarter Results/Quarter Results

28.08.2008

Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Development of business in the first three quarters of 2007/08
(October 1, 2007 June 30, 2008)> Weather-related increase in Energy segment sales volumes and revenue> Negotiations for a concession to construct three storage power
stations in Albania well advanced> Strategic partnership with Verbundgesellschaft to build a river power
plant in Albania planned> Offer submitted for a concession to expand the gas distribution
system in Croatia> Contract to construct a second large wastewater treatment facility in
Poland> Start of a share buyback programme as of July 24, 2008

2007/08
Q. 13 Change
EUR m in %
Revenue 1,842.6 + 8.3
EBITDA 300.8 - 3.3
Results from operating activities (EBIT) 165.4 -11.5
Group net profit 190.0 -14.4

The business environment in the energy sector in the first three quarters
of the financial year 2007/08 (October 1, 2007 Juni 30, 2008) was
characterised by lower temperatures compared to the same period of the
previous year, increasing wholesale electricity and primary energy prices,
stable economic growth in Austria, as well as a dynamic economic expansion
in South East Europe.

In the first three quarters of 2007/08, the EVN Group raised its total
revenue by 8.3%, to EUR 1,842.6m. The Energy segment, which profited from
lower temperatures in comparison to the preceding year, was primarily
responsible for this positive development. The Environmental Services
segment as expected posted a significant decline in revenue. Downward
pressure on margins further increased in the Energy segment during the 3rd
quarter of 2007/08, which can be attributed to massive price increases for
primary energy. Personnel expenses as well as depreciation and amortisation
also rose. As a consequence of these developments, the results from
operating activities (EBIT) amounted to EUR 165.4m, or 11.5% below the
previous years level, and Group net profit totalled EUR 190.0m, a decline
of 14.4% compared to the 3rd quarter of 2006/07.

Foreign expansion steps in preparation
In Albania, EVN is competing for two water power plant projects.
Negotiations with the government of Albania for a concession to construct
three peak load storage power plants on the Devoll River are well advanced.
The contract is awaiting the formal approval of the Albanian government and
the National Parliament. In addition, a strategic partnership is targeted
with Verbundgesellschaft to construct a river power plant in Albania.
Moreover, EVN is participating in a tender process for a concession to
expand the natural gas distribution system in the City of Zadar on
Croatias Adriatic coast, with the decision expected to be announced by the
end of 2008.

Progress within the framework of the energy concept for the Lower Austrian
Central Region
Within the context of the energy concept for the Lower Austrian Central
Region, EVN began supplying process steam from the Dürnrohr power station
to the bioethanol production facility of the Agrana AG, Vienna, in the 3rd
quarter of 2007/08. The ground-breaking ceremony for constructing the
district heating pipeline between Dürnrohr and St. Pölten with a length of
31 kilometres took place on May 20, 2008. In July 2008, EVN signed a
cooperation agreement with the Municipality of Amstetten to implement
further district heating projects on the basis of renewable energy sources
within the district area of Amstetten in the next few years. EVN assumed
responsibility for supplying the municipalities of Maria Lanzendorf,
Langau, Ottenthal and Glinzendorf with drinking water. Accordingly, the
number of customers EVN now directly supplies with drinking water has risen
by 4,100, to a total of 36,000.
New projects in Environmental Services segment
In the Environmental Services segment, WTE completed several projects in
the 3rd quarter 2007/08, but also initiated new ones. In June 2008, two
projects were concluded, namely the wastewater purification installation in
Nicosia, Cyprus, and a seawater desalination plant in Montenegro. WTE will
be responsible for operating both facilities over a period of ten years.
Moreover, WTE was awarded the Kielce contract on May 20, 2008, thus
enabling it to acquire its second large wastewater project on the Polish
market. With a total investment volume of EUR 58m, the new project
encompasses the renovation and new construction of a wastewater
purification facility.

Q. 13 2007/08: Increase in Energy segment sales volumes, delay of new
projects in Environmental segment In the first three quarters of 2007/08,
the EVN Group raised its total revenue by 8.3%, or EUR 140.9m, to EUR
1,842.6m. Primarily due to increased Electricity purchases and primary
energy expenses, along with higher personnel expenses and higher
depreciation and amortisation, the results from operating activities (EBIT)
amounted to EUR 165.4m, or 11.5% below the previous years level.
Consequently, the EBIT margin declined year-on-year from 11.0% to 9.0%.

The revenue of the Energy segment rose to EUR 1,700.7m, which is 12.9%
above the previous years level. This development is chiefly related to the
colder temperatures compared to the preceding year. The increase in segment
revenues was not reflected in the operating result (EBIT). Segment EBIT
declined by 0.8%, or EUR 1.3m, to EUR 168.3m. The decrease of the operating
result is mainly a consequence of stable electricity and gas prices from
December 1, 2006 in the light of significantly increasing electricity
market prices and primary energy prices

In the first three quarters of the 2007/08 financial year, total revenue in
the Environmental Services segment declined by 35.1%, to EUR 115.3m. This
is due to delays of new projects. EBIT fell by 71.0%, to EUR 7.9m.

The financial results of the EVN Group in the first three quarters 2007/08
declined significantly, posting a 23.2% decrease, or EUR 21.8m, to EUR
72.2m. Whereas income from investments in associates fell by 2.5%, to EUR
110.9m, interest and other financial result amounted to EUR 38.6m,
compared to EUR 19.7m in the preceding year. Higher interest income from
non-current 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
first three quarters 2007/08 amounted to EUR 237.7m, down 15.4% from the
previous year. The reduction in the income tax expense more than
compensated for the higher minority interest. As a result, the
Group net profit only fell by 14.4%, or EUR 31.8m, compared to the
preceding year, to EUR 190.0m.

Since the last balance sheet date on September 30, 2007, the balance sheet
total of the EVN Group rose by 13.6% to EUR 7,110.8m. Equity climbed by
22.6%, to EUR 3,697.2m, which in turn led to an increase in the equity
ratio from 48.1% as of September 30, 2007 to 52.0%. Taking account of the
total net debt amounting to EUR 959.3m, the gearing of the EVN Group
amounted to 25.9%, which continues to be well below the energy sector
average.

Outlook
On the basis of developments in the first three quarters of 2007/08, it
will probably not be possible in the 2007/08 financial year as a whole for
EVN to match the record performance achieved in the preceding year. The
strong price rises for primary energy will put further downward pressure on
margins in the Energy segment. Several new projects in the Environmental
Services segment were started later than originally planned. Consequently,
the profit contribution of this segment will be lower than in the preceding
financial year.

The complete Letter to Shareholders Q. 13 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

DGAP 28.08.2008
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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: AT0000741053
WKN: 074105
Indices: ATX
Listed: Foreign Exchange(s) Wien
End of News DGAP News-Service
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DGAP-News: EVN AG: Development of business in the first three quarters of 2007/08