MVV Energie affirms outlook
Mannheim-based energy company invests in renewable energies and energy efficiency - Earnings on track following 3rd quarter of 2011/12
The Mannheim-based energy company MVV Energie (WKN: A0H52F, ISIN: DE000A0H52F5) affirmed its full-year outlook upon the presentation this Wednesday of its financial report for the first nine months of the current 2011/12 financial year (1 October 2011 - 30 June 2012). According to company CEO, Dr. Georg Müller, the Group will generate further sales growth compared with the previous year's figure of Euro 3.6 billion. In terms of its operating earnings (adjusted EBIT), MVV Energie still expects to post earnings of around Euro 220 million for the current year, as against Euro 242 million in the previous year. This reduction is due, according to Dr. Müller, to mild weather conditions in the past winter, several months of downtime at the joint power plant in Kiel as a result of a damaged turbine and ongoing low earnings from electricity generation.
Between October 2011 and June 2012, the MVV Energie Group managed to increase its sales year-on-year by 11 percent to around Euro 3.0 billion. This sales growth was driven above all by further successful developments in turnover in the nationwide electricity and gas sales business, rising trading volumes, the increasing volume of electricity fed into the grid by new wind farms and higher revenues from directly marketing electricity generated from renewable energy sources. At Euro 226 million, adjusted EBIT for the first nine months were around 9 percent down on the previous year's figure.
Underlying framework remains difficult - Growth investments gaining momentum
Given the difficult, volatile conditions on the energy markets, MVV Energie's CEO is satisfied with these results: "We are thus on track." At the same time, the Group has gained further momentum with its ambitious programme of growth investments. At Euro 196 million, investments were 42 percent up on the previous year. Here, MVV Energie is making targeted investments in onshore wind power, biomass and biogas, environmentally-friendly cogeneration and district heating, as well as energy from waste.
Among the most important investment projects in the field of renewable energies are the new wind farm in Kirchberg, in the Hunsrück region of Rheinland-Pfalz, and the two biomethane plants in Klein Wanzleben and Kroppenstedt in Sachsen-Anhalt. The Group is massively promoting the expansion of cogenerationbased district heating at all of its locations from Mannheim, via Kiel, Offenbach and Ingolstadt, through to its subsidiaries in the Czech Republic, where it is now among that country's top five district heating providers. At around Euro 250 million, the Group's largest single investment relates to the energy from waste plant in Plymouth/UK, where construction work has now begun.
"Consistent with our plans, we will be investing around Euro 3 billion by 2020 in our sustainable, profitable growth, as well as in the sustainability of our grids and plants, and thus in helping convert this country's energy system along ecological lines", commented the CEO of MVV Energie. As a result, the Group would not be able to maintain its earnings for the current and next financial years at the record level seen in the two previous years. Added Dr. Müller: "These projects involve a start-up period and will only generate positive earnings contributions in the medium term following the launch of operations." Moreover, the Group's earnings were also being negatively affected by the low generation margin (clean dark spread), low waste prices, the regulatory climate in the grid business, competition in its sales and trading businesses and the costs arising due to implementation of unbundling requirements.
Downturn in gas and district heating turnover due to mild winter
Although heating energy and gas turnover in the 3rd quarter of 2011/12 were slightly ahead of the figures for the previous year's period due to cooler weather in April 2012, this was nevertheless insufficient to compensate for the loss of turnover resulting from mild temperatures between October and March. Overall, at the Group as a whole both heating energy turnover and gas turnover with private, commercial and industrial customers were 7 percent down on the previous year in the first nine months of the financial year.
By contrast, the volume of waste delivered grew year-on-year by 5 percent to more than 1.4 million tonnes. Volumes benefited for the first time from the municipal and commercial waste delivered at the newly acquired energy from waste plant in the Czech city of Liberec.
With sales of almost Euro 1.7 billion, "Sales and Services" was still the strongest segment in terms of sales at the end of the first nine months, contributing around 56 percent of total sales at the MVV Energie Group. In terms of operating earnings, however, Euro 114 million, and thus half of total earnings, were attributable to the "Generation and Infrastructure" segment. The "Trading and Portfolio Management" segment reported lower earnings in the wake of a noticeable decline in the generation margin in the electricity market. This segment's earnings fell from Euro 28 million to Euro 13 million in the first nine months of the current financial year.
Progress with energy supply conversion, but not at pace hoped for
With regard to the targeted conversion of the German energy supply along ecological lines, MVV Energie's CEO sees "progress, albeit not fast enough for some". He therefore spoke out in favour of a new way of thinking about energy. According to Dr. Müller, it is not only a matter of expanding renewable energies, but also of greater energy efficiency, modern technologies and product and process innovations. "We have to find the right balance between ecological and economic considerations. And the electricity supply has to remain reliable and affordable for consumers and companies alike. That's why we have to find a new approach to energy."
Dr. Müller stressed that it would not be possible to obtain a new energy system, one in which renewable energies assume the leading role "either at the push of a button or for free". To ensure an uninterrupted energy supply, alongside renewable energies it would also be necessary to have high-efficiency conventional power plants, as well as storage facilities for surplus electricity volumes generated from renewable sources and high-performance transmission and distribution grids. Here, the government would have to act to create incentives for the necessary investments.
Note: the complete financial report 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 30 June 2012
|Euro million||2011/12||2010/11||% change|
|External sales excluding electricity and natural gas taxes 1||2 978||2 679||+ 11|
|Adjusted EBITDA1, 2||346||362||- 4|
|Adjusted EBITA2||226||248||- 9|
|Adjusted EBIT3||226||248||- 9|
|Adjusted EBT3||177||202||- 12|
|Adjusted net surplus for period 3||121||136||- 11|
|Adjusted net surplus for period after minority interests3||106||114||- 7|
|Adjusted earnings per share 3 in Euro||1.60||1.73||- 8|
|Cash flow before working capital and taxes 1||353||351||+ 1|
|Cash flow before working capital and taxes per share 1 in Euro||5.36||5.33||+ 1|
|Free cash flow||- 200||37||-|
|Adjusted total assets at 30.6.2012 / 30.9.2011 1, 4||3 932||3 658||+ 8|
|Adjusted equity at 30.6.2012 / 30.9.20114||1 419||1 378||+ 3|
|Adjusted equity ratio at 30.6.2012 / 30.9.2011 1, 4||36.1%||37.7%||- 4|
|Number of employees at 30.6.2012 / 30.6.2011||5 837||5 841||0|
|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|