DGAP-News: EVN AG: Business development in the first half of 2015/16


DGAP-News: EVN AG / Key word(s): Interim Report
EVN AG: Business development in the first half of 2015/16

25.05.2016 / 08:00
The issuer is solely responsible for the content of this announcement.

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Highlights

  - Increase in electricity generation to support network stability

  - Reduction of 7% in the natural gas working price for household
    customers as of 1 May 2016
    within the framework of EnergieAllianz Austria

  - Contract received for three wastewater treatment projects in Macedonia

  - Group net profit above previous year

  - Confirmation of ratings by Moody's (A3) and Standard & Poor's (BBB+),
    both with stable outlook

  - Outlook for 2015/16: generally stable Group net profit expected

Key results

  - Revenue: -2.3% to EUR 1,196.8m

  - EBITDA: +10.0% to EUR 422.4m

  - EBIT: +22.4% to EUR 290.7m

  - Group net result: +14.8% to EUR 189.9m

  - Net debt: EUR 1,148.9m (30.09.2015: EUR 1,230.9m)

Energy sector environment

The temperatures in Austria remained nearly constant at the prior year
level during the first half of 2015/16. The winter weather in Bulgaria was
also extremely mild: the heating degree total was not only 13.0 percentage
points lower than the previous year, but also substantially below the long-
term average. The temperatures in Macedonia reflected the previous year
during the winter 2015/16, and the heating degree total was therefore only
slightly lower than the long-term average.

The reporting period brought a year-on-year decline not only in the price
for primary energy carriers (crude oil, natural gas and hard coal), but
also in the forward and spot market prices for base load and peak load
electricity. The forward prices applicable to the reporting period fell to
EUR 34.0 per MWh for base load electricity and to EUR 43.9 per MWh for peak
load electricity. In comparison with the first six months of 2014/15, the
spot market prices declined to EUR 29.1 per MWh for base load electricity
and to EUR 37.6 per MWh for peak load electricity.

 Higher EBIT and EBITDA in spite of decline in revenue; Group net result
above  
prior year

Revenue declined by EUR 28.0m, or 2.3%, year-on-year to EUR 1,196.8m in the
first half of 2015/16. Higher revenue was recorded from the marketing of
the electricity generated in EVN's power plants and from the network
business in Lower Austria. However, this increase was unable to fully
offset the decline resulting from a reduction in the Group's natural gas
trading activities and the volume- and price-related revenue decrease that
followed the mild winter in South Eastern Europe.

Operating expenses were lower, above all due to a decrease in the cost of
electricity purchased from third parties and primary energy expenses as
well as further improvements in collection and a parallel cost reduction in
South Eastern Europe. These developments supported an increase of EUR
38.4m, or 10.0%, in EBITDA to EUR 422.4m.

Depreciation and amortisation rose by EUR 4.2m as a result of the Group's
investment activity. EBIT totalled EUR 290.7m and was EUR 53.2m, or 22.4%,
higher than the first half of the previous year.

Financial results amounted to EUR -39.5m and were EUR 17.5m, or 79.3%,
lower than the previous year. This decline was caused primarily by the
dividend from Verbund AG, which was not included in the results from
investments for the reporting period because it was only approved by the
Annual General Meeting of
Verbund AG on 13 April 2016. Group net result rose by EUR 24.4m, or 14.8%
to EUR 189.9m.

Sound balance sheet structure; reduction of net debt
EVN's positive operating results create the foundation for a solid balance
sheet structure. The equity ratio rose to 41.4% as of 31 March 2016 (30
September 2015: 39.8%). The dividend of EUR 0.42 per share approved by the
87th Annual General Meeting on 21 January 2016 was paid on 29 January 2016
and is therefore reflected in equity. Net debt declined by EUR 81.9m, or
6.7%, below the level on 30 September 2015 to EUR 1,148.9m, and gearing
fell to 42.8% (30 September 2015: 47.5%).

Developments in the energy and project business

Energy business

EVN's electricity production rose substantially during the first half of
2015/16. The use of the company's thermal power plants to supply balancing
energy and manage shortages played an important role in this process and,
accordingly, helped to protect supply security and support the system
transformation towards renewable energy. EVN also intends to make its
thermal power plants available for these key duties in the future. For
example: these thermal power plants will be used as required during the
summer months in 2016 and 2017, in particular to stabilise the networks in
Austria based on contractual agreements. The contract for the provision of
reserve capacity for southern Germany also covers the next two winter half-
years.

The capital expenditure programme announced by EVN in the 2013/14 financial
year, which calls for investments of EUR 1bn in Lower Austria over a period
of four years, entered its third year as planned during the first half of
2015/16. Roughly 70% of the total programme will be directed to the
expansion or new construction of the network infrastructure, in particular
to transport the increased feed-in of windpower-generated electricity.
Activities in the area of energy production from renewable sources included
further progress, as planned, on the construction of the Paasdorf-
Lanzendorf windpark. From the current point of view, this windpark with its
six wind turbines and an installed capacity of 19.2 MW will be commissioned
this summer. That will move EVN an important step closer to its goal of
raising windpower generation capacity from the current level of 250 MW to
over 300 MW during the next two to three years.

EVN's distribution company in Austria passed on recent purchasing
advantages from the decline in natural gas wholesale prices to its private
customers within the framework of EnergieAllianz Austria through a price
reduction as of 1 May 2016. After a 5% decrease in both electricity and
natural gas prices last October, this further adjustment reduced the
natural gas working prices for households by approximately 7% on average.

Environmental business

Investments in the environmental services business focused primarily on
drinking water, in particular the further strengthening of supply security
and an improvement in quality. EVN also invested in improvements to the
performance capability of the Waldviertel pumping stations to handle the
increase in peak periods, especially during the summer months. The
construction of a natural filter plant in Zwentendorf an der Zaya, which
will reduce the hardness of the water by natural means, has reached an
advanced stage and should be completed at the end of June. As of 1 January
2016, EVN expanded its supply area in Lower Austria by taking over the
management of the water supply network for the community of Litschau.

In the international project business, EVN registered a major international
success during the reporting period with its selection as the general
contractor for the planning and construction of three wastewater treatment
plants in Macedonia. These projects represent EVN's market entry in the
environmental services business of that country. As of 31 March 2016, EVN
was working on the realisation of seven projects in Macedonia, Montenegro,
Czech Republic and Cyprus.

Outlook

Under the assumption of average conditions in the energy environment, the
Group net result for 2015/16 is expected to remain largely stable. The
factors that could significantly influence this net result include the
regulatory background, developments in the proceedings related to claims
from the tariff decisions in Bulgaria and the Duisburg-Walsum power plant
as well as the progress on activities in Moscow.

The complete Letter to Shareholders for the first half of 2015/16 is
available under: www.investor.evn.at.


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25.05.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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   Language:    English                                                
   Company:     EVN AG                                                 
                EVN Platz                                              
                2344 Maria Enzersdorf                                  
                Austria                                                
   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 (Amtlicher Handel / Official  
                Market)                                                
 
 
   End of News    DGAP News Service  
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466207 25.05.2016