MVV enables customers to participate in energy turnaround

Mainly due to mild weather, MVV expects slight decrease in earnings in current 2019 financial year.

By consistently aligning its business to the future energy system and investing substantial amounts in growth, the Mannheim-based group of companies MVV (WKN: A0H52F; ISIN: DE000A0H52F) is underlining its role as a pioneer of the energy turnaround and also boosting its position as one of Germany’s leading energy companies. “Our products and services provide a sustainable, environmentally-compatible and climate-friendly energy supply and already enable our customers to participate directly in the energy turnaround”, stressed Dr. Georg Müller, MVV’s CEO, when presenting the company’s results for the first six months of the current 2019 financial year (1 October 2018 – 31 March 2019) in Mannheim on Wednesday.

The company will maintain this course in future as well so as to exploit the opportunities resulting from the energy system conversion for its long-term growth. Comments Dr. Müller: “This way, we are developing our company along sustainable lines and with a view to the future.” Today already, retail customers can individually compile their own sustainable energy packages – comprising a photovoltaics system, battery storage facility, smart control and an electric car and charging point. Not only that, with its Smart Cities business field MVV is acting as a system partner to local authorities and offering networked solutions for the cities of the future. With its competence, experience and power of innovation, the company also offers a broad range of products and services to its business customers in the SME, industrial and housing sectors.

Turning to the company’s earnings for the first six months of the 2019 financial year, MVV’s CEO referred once again to the expansion of renewable energies in Germany, which had stalled due to inappropriate privileging in the wind power tender rounds in 2016 and 2017. As a result of this, the Group’s operating earnings in its “New Energies” reporting segment had already shown a marked year-on-year reduction in the months from October to December 2018. These privileges have now been suspended. In the tender rounds since held on fair competitive terms MVV’s project development companies Juwi and Windwärts were awarded numerous onshore wind and open-space photovoltaics projects in Germany.
 
Juwi, for example, began work on building the 1,000^th wind turbine in its history this spring. Juwi’s international business is now also showing a significant recovery. Just a few weeks ago, the company announced the receipt of its largest US project to date, involving the construction of a 123 MW photovoltaics system in the State of Colorado. In view of these factors, MVV expects its project development business to show positive developments in the further course of the year.

Further factors adversely affecting MVV’s half-year earnings included weather conditions, and above all the unusually mild winter with significantly lower heating energy requirements and weaker wind volumes leading to correspondingly lower electricity generation volumes at MVV’s proprietary wind turbines. These factors were supplemented by follow-up costs for the joint power plant in Kiel (GKK), which was decommissioned at the beginning of April. Year-on-year comparison of the earnings figures is also influenced by the proceeds from two transactions in the first quarter of the previous year, which led to positive one-off items in the “Customer Solutions” and “Supply Reliability” reporting segments. This income was not matched by any equivalent items in the current financial year.

Against this backdrop, MVV’s adjusted EBIT came to Euro 161 million in the first half of the 2019 financial year and thus still fell 28 percent short of the previous year’s figure. After the weaker first quarter came a second quarter that was in line with expectations overall but unable to make up for the shortfall from the first quarter. Sales decreased by around 10 percent to Euro 1.9 billion, with a large share of this reduction also being due to an amendment to International Financial Reporting Standards (IFRS).

After four years of earnings growth, MVV expects both its sales and its operating earnings for the 2019 financial year as a whole to fall slightly short of the previous year’s figures. Alongside the earnings-related factors referred to above, earnings for the second half of the current financial year will also be affected by the turbine damage arising at the biomass power plant at Ridham Dock at the end of March and the resultant reduction in UK plant availability levels.

Comments Dr. Müller: “That will in no way change MVV’s focus on the energy world of the future.” This is confirmed by looking at the volume of growth investments being made by the Mannheim-based group of companies, which rose by around a third in the first half of the financial year. MVV announced a significant rise in its full-year investments. These will be channelled not only into the growth but also into modernising and maintaining the company’s plants and grids. Overall, MVV intends to invest around three billion euros in the coming years.