MVV Energie defies mild winter
Mannheim energy company affirms earnings forecast - Ongoing difficult energy market framework and weather conditions lead to reduction in operating earnings - 27 percent growth in electricity generated from renewable energies
Mannheim-based energy company MVV Energie (WKN: A0H52F, ISIN: DE000A0H52F5) boosted its electricity generation from renewable energies by 27 percent in the first six months of the current 2013/14 financial year (1 October 2013 - 31 March 2014) compared with the previous year's period. The Group announced this upon the presentation of its half-year financial report in Mannheim on Thursday. Overall, in this period MVV Energie generated around 479 million kilowatt-hours of electricity, chiefly from wind power and biomass. That is equivalent to the average consumption of almost 275,000 three-person households.
For Dr. Georg Müller, CEO of the energy group, this growth offers "visible proof of the success of our investment programme, where expanding renewable energies is one of the key focuses". Just in February, the Energieversorgung Offenbach (EVO) subsidiary launched operations at its fourth wind farm close to Kirchheimbolanden in Rheinland-Pfalz. The MVV Energie Group now has onshore wind turbines with a total installed capacity of 174 megawatts, making it one of the leading wind power operators among Germany’s traditional energy suppliers.
Further expansion in renewable energies
The Mannheim energy company has expanded its renewable energies involvement in the field of biomethane generation as well. The Group's second plant, in this case in Kroppenstedt (Sachsen-Anhalt), was also linked up to the grid in February. "By making targeted investments in forward-looking projects and developing innovative products and services, MVV Energie is seizing the opportunities presented by the fundamental transformation in the energy system", commented MVV Energie's CEO. This was creating foundations for further sustainable, profitable growth. This is underlined by the Group's investments, which rose to Euro 166 million in the past six months. Of this total, Euro 123 million alone was channelled into growth investments, while a further Euro 43 million was invested in modernising plants and grids.
With regard to the current political discussions surrounding the Amendment to the German Renewable Energies Act (EEG) due to take effect as of 1 August 2014, Dr. Müller supports the course taken by the Federal Government to steer the renewable energies expansion along sensible ecological and economic lines and thus to set course for greater cost efficiency and growth. The CEO spoke out in favour of a market system in which "both renewable, but volatile, and conventional energies, and here especially highly efficient combined heat and power generation, can be operated in a way that makes both macroeconomic and microeconomic sense". He is convinced that flexible conventional generation and storage capacities and re-serve power plants will still be needed in future to offset fluctuations in electricity generation volumes from wind and solar power. Not only that, transmission and distribution grids would have to be expanded and converted to facilitate the intelligent acceptance and distribution to customers of the growing electricity volumes generated on a decentralised basis.
Mild weather leaves its mark
Alongside the ongoing tough energy market framework, with a further decline in generation prices, the very mild weather conditions seen in the recent winter have, as expected, left their mark on MVV Energie's sales and earnings. The Group's sales from October through to the end of March thus declined year-on-year by six percent to Euro 2.1 billion, while adjusted operating earnings (adjusted EBIT) reduced by 14 percent to Euro 154 million.
The Group's business performance was substantially influenced by weather conditions in the winter months. Measured in terms of degree day figures across all of the locations of the MVV Energie Group, the six-month period from October to March was around 17 percent warmer than in the previous year. Accordingly, the Group's heating energy and gas turnover in its "Sales and Services" segment also fell by 17 percent and 18 percent respectively. This was the main reason for the reduction in sales and earnings.
Success with innovative products and services
"Success in our sales activities, together with efficiency enhancements and cost savings, largely enabled us to counter the weather factor", stressed Dr. Müller. The CEO pointed in particular to the Group's success with innovative products and services. The Electricity/Gas Energy Fund, which provides small and medium-sized industrial and commercial customers as well with inexpensive access to structured procurement, continues to perform very positively. The company can also report growth in its direct marketing of electricity from renewable energies. MVV Energie currently has renewable energies power plants with a capacity of 2,500 megawatts under contract. With volumes of 1,300 megawatts, the company is now the national market leader in directly marketing volumes from photovoltaics plants.
The Group's latest offer is a proprietary minute reserve pool that provides customers with proprietary electricity generation or emergency power systems with the opportunity to participate in the balancing energy market and thus to generate additional revenues. Since autumn 2013, the Mannheim energy company has been marketing this minute reserve capacity nationwide across all four control areas. From mid-2014, the Group plans to begin marketing secondary balancing energy capacity, starting in the TransnetBW control area in south-west Germany.
Earnings forecast affirmed – Positive outlook
The company has affirmed its existing earnings forecast: "All in all, we still expect to generate adjusted EBIT of between Euro 170 million and Euro 185 million in the financial year as a whole". Given weather conditions to date, however, MVV Energie expects adjusted EBIT "most probably in the lower third of this range". In terms of sales, given the weather-related reduction in heating energy and gas turnover the company now no longer expects its full-year sales to surpass, but rather to more or less match the previous year's figure, in which sales exceeded the four billion euro mark for the first time in the company's history. Thanks to the investments made in the future, MVV Energie's CEO expects sales and earnings to increase once again, assuming normal weather conditions, in the coming financial year already.
The complete financial report is available at
|Key figures of the MVV Energie Group|
1 October 2013 to 31 March 2014
|Euro million||1 Oct 2013|
to 31 Mar 2014
|1 Oct 2012|
to 31 Mar 2013
|Sales and earnings|
|Sales excluding energy taxes||2 103||2 231||- 6|
|Adjusted EBITDA1,2||233||261||- 11|
|Adjusted EBIT1,2||154||180||- 14|
|Adjusted EBT1,2||125||146||- 14|
|Adjusted net income for period 1,2||87||100||- 13|
|Adjusted net income for period after minority interests1,2||73||78||- 6|
|Adjusted earnings per share 1,2 (Euro)||1.10||1.19||- 8|
|Cash flow from operating activities||63||- 5||-|
|Cash flow from operating activities per share (Euro)||1.06||- 0.09||-|
|Adjusted total assets (at 31 Mar 2014/30 Sep 2013)3||4 161||4 037||+ 3|
|Adjusted equity (at 31 Mar 2014/30 Sep 2013)2,3||1 400||1 391||+ 1|
|Adjusted equity ratio (at 31 Mar 2014/30 Sep 2013)2,3||33.6%||34.5%||- 3|
|Net finantial debt (at 31 Mar 2014/30 Sep 2013)||1 275||1 111||+ 15|
|Total investments||166||164||+ 1|
|of which growth investments||123||133||- 8|
|of which investments in existing business||43||31||+ 39|
|Number of employees (at 31 Mar 2014/31 Mar 2013)||5 406||5 462||- 1|
|1||excluding non-operating measurement items for financial derivatives, excluding structural adjustment for part-time early retirement, excluding restructuring expenses and including interest income from finance leases|
|2||figures for previous year and/or 30 September 2013 adjusted|
|3||excluding non-operating measurement items for financial derivatives|