Mild winter squeezes earnings at MVV Energie
Weather leads to decline in heating energy and gas turnover - Additional charge due to turbine damage at joint power plant in Kiel (GKK) - Full-year outlook confirmed
The unusually mild winter months of October to December 2011 led to a noticeable downturn in district heating and gas turnover at the Mannheim-based energy company MVV Energie (WKN: A0H52F, ISIN: DE000A0H52F5). As announced by the company upon the presentation of its financial report for the 1st quarter (1 October - 31 December 2011) of its current 2011/12 financial year in Mannheim on Wednesday, heating energy and gas turnover in Sales and Services, the company's largest segment in terms of sales, fell by 19 percent and 21 percent respectively compared with the especially cold months in the previous year. Ongoing volume-driven sales growth in nationwide electricity and gas sales with industrial and commercial customers was also insufficient to make up for these weather-related downturns. Furthermore, turbine damage at the joint power plant in Kiel (GKK), which was out of operation for almost four months, also burdened the Group's earnings by just over Euro 10 million.
According to Dr. Georg Müller, CEO, these two factors, as well as higher coal procurement transport costs due to low river levels, led operating earnings (adjusted EBIT) to fall by Euro 17 million to Euro 74 million. At the same time, the company managed to boost its three-month sales year-on-year by 7 percent from Euro 950 million to Euro 1 018 billion.
The company has affirmed its outlook for the 2011/12 financial year as a whole. Year-on-year, MVV Energie thus expects to post slight sales growth and a decline in adjusted EBIT on a scale of up to a single-digit percentage range. Commented Dr. Müller: "Given the weather-related downturn in the 1st quarter and the months of downtime at GKK, that represents an ambitious target, but one by which we continue to stand."
By analogy with adjusted EBIT, adjust EBT, i.e. adjusted earnings before taxes on income, decreased from Euro 76 million to Euro 59 million. Net of taxes on income and minority interests, the adjusted net surplus after minority interests amounted to Euro 37 million in the 1st quarter of 2011/12, as against Euro 45 million one year earlier. That corresponds to adjusted earnings per share of Euro 0.57, as against Euro 0.68 in the 1st quarter of 2010/11.
The sales growth was due above all to more active management of the electricity and gas portfolio within the procurement and marketing activities performed by the energy trading subsidiary MVV Trading. Accordingly, sales in this "Trading and Portfolio Management" reporting segment rose by 39 percent to Euro 277 million. Moreover, electricity sales with industrial and commercial customers also developed positively, with 5 percent turnover growth driven in particular by further success in the nationwide business.
The Group also significantly stepped up its investments in the 1st quarter of 2011/12. Having still amounted to Euro 37 million in the previous year¿s period, the volume of investment made between October and December 2011 rose to Euro 92 million in total. The main focus here, accounting for Euro 52 million, involved renewable energies. The largest single individual investments were the wind farm in Kirchberg (Rheinland-Pfalz), the biomethane plant in Klein Wanzleben (Sachsen-Anhalt) and the planned energy from waste plant in Plymouth in the south-west of the UK.
Commented Dr. Müller: "Our growth programme has thus picked up further momentum. We are committed without reservation to the energy turnaround and are investing in expanding renewable energies, energy-efficient cogeneration, environmentally-friendly district heating and the generation of energy from waste." The Group has budgeted investments of around Euro 700 million for the current and coming financial years alone. By 2020, MVV Energie intends to invest Euro 3 billion in total.
Note: the complete financial report for the 1st quarter of the 2011/12 financial year can be found on the internet in the download section of our investor relations site at
|Key Figures of the MVV Energie Group 1 October 2011 to 31 December 2011|
|Euro million||2011/12||2001011||% change|
|Sales excluding electricity and natural gas taxes1||1 018||950||+ 7|
|Adjusted EBITDA1,2||114||129||- 12|
|Adjusted EBITA2||74||91||- 19|
|Adjusted EBIT3||74||91||- 19|
|Adjusted EBT3||59||76||- 22|
|Adjusted net surplus for period3||40||51||- 22|
|Adjusted net surplus for period after minority interests3||37||45||- 18|
|Adjusted earnings per share,3 in Euro||0.57||0.68||- 16|
|Cash flow before working capital and taxes1||113||114||- 1|
|Cash flow before working capital and taxes per share1 in Euro||1.71||1.73||- 1|
|Free cash flow||- 112||- 5||-|
|Adjusted total assets (at 31.12.2011 / 30.9.2011) 4||3 835||3 658||+ 5|
|Adjusted equity (at 31.12.2011 / 30.9.2011)1,4||1 409||1 378||+ 2|
|Adjusted equity ratio (at 31.12.2011 / 30.9.2011)4||36.7%||37.7%||- 3|
|Employees (at 31.12.2011 / 31.12.2010)||5 872||5 992||- 2|
|1||previous year's figure adjusted|
|2||excluding non-operating IAS 39 derivative measurement items and including interest income from finance leases|
|3||excluding non-operating IAS 39 derivative measurement items, including interest income from finance leases and excluding restructuring expenses in previous year|
|4||excluding non-operating IAS 39 derivative measurement items|