EQS-News: EVN AG: Business development in the first half of 2022/23

EQS-News: EVN AG / Key word(s): Half Year Results
   EVN AG: Business development in the first half of 2022/23

   25.05.2023 / 07:30 CET/CEST
   The issuer is solely responsible for the content of this announcement.

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   Highlights

     • Increase in Group net result to EUR 217.4m based on different
       developments in the individual segments and positive valuation of
       energy generation hedges as of 31 March 2023
     • Substantial negative effects and half-year loss (EUR 223.1m) at the
       energy supply company EVN KG
     • Commissioning of the wind park in Japons (12.6 MW, repowering) and the
       photovoltaic plant in Grafenwörth (EVN share: 12.2 MWp) – further
       renewable projects with a combined capacity of roughly 110 MW
       currently under construction
     • Share of renewable generation: 72.0%
     • Increase in annual investments to over EUR 600m, of which roughly
       three-fourths in Lower Austria
     • Commission received for the construction of a wastewater treatment
       plant and sewage sludge utilisation plant in North Macedonia
     • Ratings confirmed: Moody’s (A1, outlook: stable); Scope Rating (A+,
       outlook: stable)

    

   Energy sector environment

   The first half of 2022/23 was influenced by mild temperatures which were
   lower than the previous year as well as the long-term average in EVN’s
   three core markets. The prices for primary energy generally declined after
   strong fluctuations in the previous reporting period. The market prices
   for base load and peak load electricity were substantially lower during
   the first half of 2022/23 but remain at a high level: The spot market
   prices for base load and peak load electricity averaged EUR 178.3 per MWh
   and EUR 215.8 per MWh, respectively, and reflect a substantial reduction
   below the comparable prior year values of EUR 211.0 per MWh and EUR 251.4
   per MWh. The price for CO[2] emission certificates represented an
   exception with an increase during the reporting period.

    

   Revenue, EBIT and Group net result above previous year

   Revenue recorded by the EVN Group rose by 3.1% to EUR 2,192.6m in the
   first half of 2022/23. This increase was supported, above all, by price
   effects from renewable electricity generation, valuation effects from
   hedges and price adjustments at EVN Wärme. In South East Europe, higher
   network tariffs and an unscheduled electricity price increase for the
   regulated household customer segment in North Macedonia only partly offset
   the revenue lost due to lower network and energy sales volumes and
   declining electricity prices. Growth was also recorded in the
   international project business through progress on the major project in
   Kuwait.

   In line with the development of revenue in South East Europe, the cost of
   energy purchases from third parties and primary energy expenses declined
   by 22.1% to EUR 1,024.2m. Contrasting factors included, above all, higher
   costs for network losses and upstream network costs for Netz
   Niederösterreich as well as higher energy procurement costs for EVN Wärme.
   Moreover, expenses in the previous year were reduced by compensation
   payments from the Bulgarian government to cover the network losses caused
   by higher energy prices.

   The cost of materials and services rose by 12.5% to EUR 326.7m consistent
   with the development of revenue in the international project business and
   as a result of inflation.

   Personnel expenses were 7.7% higher year-on-year at EUR 193.2m due to
   adjustments required by collective bargaining agreements. The number of
   employees increased to 7,185 (previous year: 7,147 employees).

   Other operating expenses rose by 61.5% to EUR 100.8m. This position
   includes the levy on the surplus proceeds earned from electricity
   generation which has been payable in Austria since December 2022.

   The share of results from equity accounted investees with operational
   nature equalled EUR –143.3m in the first half of 2022/23 (previous year:
   EUR 85.2m). This sharp drop – as reported in the first quarter and
   projected for the remainder of this year – is attributable to the energy
   supply company EVN KG, where business development was massively influenced
   by multiple factors: In addition to higher procurement costs for energy
   which can only be passed on to customers with a delay, earnings were
   negatively influenced by the lower valuation of hedges as of 31 March
   2023, additions to the provisions for impending losses from contractual
   delivery obligations and the valuation of natural gas inventories
   purchased in the previous year at significantly higher wholesale prices to
   protect supply security in view of the threatened stop in gas deliveries.
   A contrasting factor was the improvement in the earnings contribution from
   RAG, the Verbund Innkraftwerke and Burgenland Energie.

   Based on these developments, EBITDA recorded by the EVN Group rose by
   11.0% year-on-year to EUR 466.4m in the first half of 2022/23. Investments
   led to an increase of 2.7% in scheduled depreciation and amortisation to
   EUR 162.6m. A comparison of this position with the previous year is also
   influenced by the absence of EUR 50.9m from impairment testing in 2021/22:
   Impairment losses of EUR 57.3m in the international project business had
   been contrasted by a revaluation of EUR 6.4m to the Kavarna wind park in
   Bulgaria. In total, EBIT rose by 44.0% to EUR 303.8m.

   Financial results improved to EUR –27.5m (previous year: EUR –31.3m)
   despite an increase in interest expense and foreign exchange valuation
   effects. This development reflected the better performance of the R138
   fund and EVN’s cash funds.

   The result before income tax equalled EUR 276.2m for the reporting period
   and was 53.7% higher than the previous year. After the deduction of EUR
   35.2m (previous year: EUR 44.1m) in income tax expense and the earnings
   attributable to non-controlling interests, Group net result for the period
   equalled EUR 217.4m. That represents a year-on-year increase of 70.6%.

    

   Solid balance sheet structure

   EVN’s capital structure remains solid and stable. The increase in net debt
   to EUR 1,748.4m as of 31 Mach 2023 resulted from the continuing high level
   of investment and from the liquidity settlement for the energy supply
   company EVN KG to cover working capital requirements.

    

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

   Energy business

   EVN’s electricity generation declined by 21.2% year-on-year to 1,573 GWh
   in the first half of 2022/23. Favourable water flows were unable to fully
   offset the below-average wind flows. The Theiss power plant, which is
   available to the transmission network operator to stabilise the
   electricity networks, was used much less frequently than in the previous
   year.

   The share of renewable generation rose to 72.0% (previous year: 59.7%).
   The wind park in Japons, which was rebuilt as part of a repowering, was
   commissioned in January 2023 (installed capacity: 12.6 MW). In February
   2023, the largest floating photovoltaic plant in Central Europe was
   commissioned in Grafenwörth (EVN share: 12.2 MWp). Three further wind
   parks and three photovoltaic projects with total capacity of 72 MW and 36
   MW, respectively, are currently under construction in line with the
   targets for the expansion of renewable energy. EVN’s annual investments
   were increased to over EUR 600m, of which roughly three-fourths are
   located in Lower Austria with a focus on network infrastructure, renewable
   generation and drinking water supplies.

    

   Environmental and water business

   Investments in drinking water supplies continue to focus on the planning
   and construction of transport and connecting pipelines to improve and
   protect supply security.

   In the international project business, WTE Wassertechnik received a
   commission for the construction of a wastewater treatment plant and a
   sewage sludge utilisation plant in Skopje, North Macedonia, as part of a
   general contractor assignment. The contract value totals approximately EUR
   184m. As of 31 March 2023, WTE Wassertechnik was working on the planning
   and construction of 14 projects for wastewater treatment, drinking water
   treatment and thermal sludge utilisation in Germany, Poland, Lithuania,
   Romania, North Macedonia, Bahrain and Kuwait

    

   Outlook and special dividend for the 2022/23 financial year

   The contribution by EVN’s operating activities to Group net result for the
   2022/23 financial year is expected to reflect the upper end of the
   previously communicated range at approximately EUR 250m. In addition, the
   earnings contribution from the investment in Verbund AG in the amount of
   EUR 158m will contribute to the Group net result in 2022/23. The Executive
   Board decided and reported on 15 May 2023 to propose to the 95^th Annual
   General Meeting on 1 February 2024 a special dividend of EUR 0.62 per
   share in addition to the ordinary dividend for the 2022/23 financial year.
   The ordinary dividend is expected to amount to at least EUR 0.52 per
   share.

    

   The Letter to Shareholders on the first half of 2022/23 is available under
   www.investor.evn.at.

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   25.05.2023 CET/CEST 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:      [email protected]
   Internet:    www.evn.at
   ISIN:        AT0000741053
   WKN:         074105
   Indices:     ATX
   Listed:      Vienna Stock Exchange (Official Market)
   EQS News ID: 1640901


    
   End of News EQS News Service


   1640901  25.05.2023 CET/CEST

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