MVV Energie hits the gas
Investment programme underway at Mannheim energy company - Focus on renewable energies - Earnings on track after 3rd quarter of 2010/11
The Mannheim-based energy company MVV Energie is literally hitting the gas. Just a few days ago, the SDAX-listed group (ISIN: DE000A0H52F5, WKN: A0H52F) held the groundbreaking ceremony for its first biomethane plant, marking its successful entry into a new business field within its planned expansion of renewable energies. What's more, the company's previously announced investment programme has also gained increasing momentum in recent weeks. Upon the publication of the results for the first nine months of its current 2010/11 financial year (1 October 2010 - 30 June 2011) in Mannheim on Friday, company CEO Dr. Georg Müller affirmed the company's plans to invest a total of around Euro 1.5 billion by 2020 in expanding renewable energies and environmentally-friendly cogeneration and to channel the same amount into maintaining and servicing its existing plants and grids. The company's successful entry into the wind energy market, with its acquisition last year of a wind farm in Plauerhagen / Mecklenburg-Vorpommern has been followed most recently by the awarding of the contract for an energy from waste plant in Plymouth/UK and the takeover of a waste-fired heating energy plant in Liberec/Czech Republic.
According to Dr. Müller, these successes offer visible proof that the company set the right course more than two years ago. "We are consistently implementing our strategy. The irreversible turnaround in energy policy now adopted has further confirmed us on this course."
At the same time, in the year to date MVV Energie has also met its expectations, thus matching the previous year's figures. Thanks to ongoing success in the nationwide sale of electricity and gas to industrial and commercial customers, sales showed slight year-on-year growth of 5 percent to Euro 2.7 billion. The company's adjusted operating earnings (adjusted EBIT) of Euro 248 million are only slightly down on the previous year¿s figure.
With regard to the financial year due to end at the end of September 2011, the company has therefore affirmed its forecast of matching the previous year's high figures, with external sales of Euro 3.4 billion and adjusted EBIT of Euro 243 million.
Further sales growth with industrial and commercial customers
In a tough economic and political climate, one in which many energy companies face falling sales and earnings, MVV Energie can thus report a stable earnings situation. In the hotly contested German energy market, MVV Energie managed to increase its nationwide electricity turnover with industrial and commercial customers by 3 percent to 7.1 billion kilowatt hours in the past nine months, while gas turnover in the same customer segment soared by 17 percent to 3.9 billion kilowatt hours. "The fact we managed to generate this growth in a tough competitive climate shows that our strategic focus on nationwide electricity and gas sales is exactly right", commented Dr. Müller. According to the MVV boss, the same was true for the company's overall positioning, one that covered the entire energy industry value chain. "That makes us less dependent on macroeconomic fluctuations and changes in energy policy."
"Sales and Services", which contributed sales in excess of Euro 1.6 billion, or around 61 percent of total sales at the MVV Energie Group in the past nine months, remained the strongest reporting segment in terms of sales. With operating earnings (adjusted EBIT) of Euro 110 million, the "Generation and Infrastructure" reporting segment continued to account for virtually half of the Group's total earnings. "Trading and Portfolio Management" reported a downturn in earnings due to the marked decline in the generation margin, the so-called clean dark spread, on the electricity market. Earnings in this segment fell from Euro 34 million to Euro 29 million in the first nine months of the current financial year.
Expansion in district heating progressing on schedule
Meanwhile, the company's district heating expansion programme is progressing on schedule. Further customers can now be supplied with environmentally-friendly district heating following the launch of operations with the new district heating pipeline from Mannheim to Speyer. At the same time, the largest district heating project in Bavaria, involving the integration of the Petroplus refinery and the AUDI plant, commenced operations in Ingolstadt in June 2011. The company also recently had successful news in terms of the expansion of its regional municipal utility network - MVV Energie will be acquiring a 25.1 percent stake in Stadtwerke Walldorf as of 1 January 2012, thus further boosting and providing a long-term foundation for its already longstanding cooperation with this municipality in northern Baden.
Investments in the future
"It goes without saying that these new investment projects will initially cost us money during the planning and construction period", added Dr. Müller. "But we are investing in the future - and in the future viability of our company". In view of this, he often highlighted the opportunities harboured by the energy turnaround without neglecting the risks. "We have to act now to lay foundations for our profitable growth in the coming years." MVV Energie was assuming a pioneering, market-oriented role in terms of the conversion in the energy supply.
Here, the group of companies has a special focus on expanding onshore wind power. Dr. Müller sees considerable potential for expansion in this area, particularly in Baden-Württemberg, which the new state government plans to turn into the leading region in terms of energy policy and climate protection. "Onshore wind power represents a proven, economically effective technology, one that can open up new opportunities especially for smaller-scale investors in the region, such as local government, agriculture and forestry, municipal utility companies and private individuals." Not only that, this technology enabled electricity to be generated close to high-consumption industrial centres in southern Germany, thus reducing the need for costly extensions to electricity grids.
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 2010 to 30 June 2011|
|Euro million||2010/11||2009/10||% change|
|Sales excluding electricity and natural gas taxes||2 679||2 554||+ 5|
|Adjusted EBITDA1||355||359||- 1|
|Adjusted EBITA1||248||253||- 2|
|Adjusted EBIT2||248||253||- 2|
|Adjusted EBT2,3||202||192||+ 5|
|Adjusted net surplus for period2,3||136||129||+ 5|
|Adjusted net surplus for period after minority interests2,3||114||120||- 5|
|Adjusted earnings per share2,3 in Euro||1.73||1.83||- 5|
|Cash flow before working capital and taxes||351||375||- 6|
|Cash flow before working capital and taxes per share in Euro||5.33||5.69||- 6|
|Free cash flow||37||112||- 67|
|Adjusted total assets (at 30.6.2011 / 30.9.2010) 4||3 497||3 457||+ 1|
|Adjusted equity (at 30.6.2011 / 30.9.2010)4||1 387||1 233||+ 12|
|Adjusted equity ratio (at 30.6.2011 / 30.9.2010)4||39.7%||35.7%||+ 11|
|Employees (at 30.6.2011 / 30.6.2010)||5 841||5 997||- 3|
|1||excluding non-operating IAS 39 derivative measurement items and including interest income from finance leases (previous year's figures adjusted)|
|2||excluding non-operating IAS 39 derivative measurement items and restructuring expenses and including interest income from finance leases (previous year's figures adjusted)|
|3||impact of expiry of Kiel put option|
|4||excluding non-operating IAS 39 derivative measure items|