MVV consistently maintains #climatepositive course

“With our #climatepositive course and our mutually complementary business models, we are well positioned to maintain our sustainable growth”, was the conclusion drawn by Dr. Georg Müller, CEO of the Mannheim-based energy company MVV Energie AG (ISIN: DE000A0H52F5; WKN: A0H52F), upon publication of the results for the 1st quarter of the 2023 financial year (1 October 2022 – 31 December 2022). Despite ongoing macroeconomic uncertainties and volatility on the energy and procurement markets, MVV was able to report a good start in the first three months of the current 2023 financial year.

International renewables project development business contributes to earnings growth
At around Euro 1.6 billion, MVV’s adjusted sales were 21 percent up on the previous year. This growth is chiefly attributable to the year-on-year increase in wholesale electricity and gas prices. Operating earnings (operative adjusted EBIT), i.e. earnings excluding disposal gains, amounted to Euro 145 million and were thus significantly higher than in the previous year (Euro 92 million). To avoid distorting comparison with previous years, this key earnings figure does not include the oneoff income generated by MVV in the quarter under report due to the sale of its Czech subgroup.

This earnings growth on the one hand resulted from one-off developments on wholesale energy markets. On the other hand, earnings benefited from the international project development business in the field of renewable energies. With the Pike Solar project in the US state of Colorado, MVV’s wholly-owned subsidiary Juwi is thus implementing the largest solar park in the company’s history. Operations here are expected to be launched by the end of 2023. To this end, a total of 414,000 solar modules will be installed in the months ahead on an area of around 530 hectares. With a capacity of more than 223 megawatts, the park will supply electricity for around 46,300 households. Moreover, Juwi is executing an even larger solar project with a capacity of around 330 megawatt-peak in the US state of Washington. This is scheduled to be connected to the grid by the end of 2025. Juwi is also implementing a larger-scale solar park in Japan. Operating earnings were negatively affected by the windfall tax for the month of December. This was resolved by the Federal Government at the end of 2022 in order to refinance the price caps intended to assist consumers and industry. Weather conditions were also milder than in the previous year, which had a correspondingly adverse impact on earnings.

Energy-saving measures take effect
“The reduction in heat and gas turnover in the first quarter of the 2023 financial year was due not only to mild winter temperatures, but also to savings measures taken by MVV’s customers”, explained Dr. Müller. “These show that the urgent appeals issued by the Federal Government and the EU were effective, as was our own information campaign to help customers save energy.” Excluding the impact of weather conditions, energy-conscious actions enabled customers in the Mannheim grid area, for example, to use up to 15 percent less gas between October 2022 and January 2023 than in the same period in the previous year.

Forecast confirmed
For the financial year as whole, MVV currently continues to expect its adjusted EBIT from an operating perspective, i.e. excluding disposal gains, to at least match the previous year’s figure. “Depending on the macroeconomic situation, further developments in regulatory requirements and wholesale energy markets, however, we also see opportunities to exceed the previous year’s level of adjusted EBIT excluding disposal gains”, commented Dr. Müller. This would depend on further developments in the course of the financial year.

#climatepositive is MVV’s compass
At the same time, MVV’s CEO underlined: “Germany has coped not too badly with the energy crisis to date.” With the short-term measures taken to secure the energy supply and mitigate the social impact of higher energy prices, the Federal Government had set the right focuses. “Now it is about looking further ahead again and at Germany’s long-term conversion to climate neutrality”, demanded Dr. Müller and added: “Becoming #climatepositive from 2040 at the latest remains the compass for the whole of our MVV Group and the factor that sets us apart from competitors.” In line with this, the MVV Group continued to work on its investment projects in the past quarter and channelled a total of Euro 78 million into converting its proprietary energy supply in the period from October to December 2022.

In parallel, MVV’s ambitious goals also require the energy company to regularly review and evaluate its portfolio of investments. Here, MVV accounted above all for factors such as strategic fit, economic viability and the contribution made to its decarbonisation targets. In light of these factors, the company decided in the 2022 financial year to sell its subsidiary in the Czech Republic. MVV successfully completed the sale of this subsidiary to the investor Cube Infrastructure Managers in December 2022. “We will invest the proceeds from the sale into further expanding our Mannheim Model, and thus in the heat transition, the electricity transition and green customer solutions” commented Dr. Müller by way of conclusion.

The complete quarterly statement is available online at www.mvv.de/investors.