MVV Energie maintains its growth course
Annual General Meeting of Mannheim energy company with positive outlook - Investments in energy turnaround to remain strategic focus - Ever greater focus on partnership-based customer relationships
The Mannheim-based energy company MVV Energie believes that the successful implementation of the energy turnaround will not only affect the structure of energy generation and further grid expansion in Germany, but will also change the future relationship between the energy industry and consumers. "In tomorrow’s decentralised energy world, customers will increasingly act as partners", stressed Dr. Georg Müller, CEO of MVV Energie, at this year's Annual General Meeting held by the company at Congress Center Rosengarten in Mannheim on Friday. "An innovative range of products and services along the entire energy industry value chain therefore forms an integral component of our strategic alignment." MVV Energie offered suitable products and services enabling its customers, from private households to business and commercial customers through to the real estate sector and industrial players, to implement their own energy turnarounds. "That too makes us a pioneer and a key driver of the energy turnaround in Germany."
At the same time, the company intends to continue investing in the energy turnaround. In the years ahead, it will be channelling an additional Euro 3 billion into expanding renewable energies, boosting energy efficiency and modernising and maintaining its existing grids and plants. Comments Dr. Müller: "We aim to use our competence and power of innovation to seize the opportunities presented by the energy turnaround and consistently maintain our profitable growth course."
In the 2016 financial year, MVV Energie for the first time generated more than one billion kilowatt hours of electricity from renewables, corresponding to the annual average private consumption of almost one million people. The Mannheim-based energy company thus managed to increase its green electricity generation volumes by 25 percent. Together with its Juwi and Windwärts shareholdings, the Group connected renewable energies plants with a capacity of almost 700 megawatts to the grid in the past year alone.
The MVV CEO referred to the construction of a new gas motor combined heat and power plant at Stadtwerke Kiel as the Group's largest single investment in the coming years. The "Küstenkraftwerk K.I.E.L." plant, which will cost around Euro 290 million, is set to launch operations directly on Kiel Fjord in two years' time. With 20 highly efficient gas motors and a primary energy efficiency rate of more than 90 percent, the plant will generate electricity and heat. Remarks Dr. Müller: "This is an energy turnaround power plant par excellence. It also shows how investing in non-renewables can help the energy turnaround to succeed".
Dr. Müller sees sector coupling as representing a major key to the success of the energy turnaround, "supplementing the electricity turnaround with turnarounds in heat and mobility as well". The Mannheim energy company assumes that green electricity will contribute decisively to making the heating energy supply and transport more environmentally friendly as well. That in turn would lead to growing demand for electricity in future, and most of this would have to be generated from renewables. In view of this, at the Annual General Meeting Dr. Müller renewed his call for Germany’s renewables target to be raised from 45 percent to 55 percent by 2025. At the same time, he underlined the need for further development in combined heat and power generation and district heating in a way that made sense from an environmental and energy industry perspective.
Annual earnings growth
In the past 2016 financial year (1 October 2015 – 30 September 2016), MVV Energie raised its operating earnings (adjusted EBIT) from Euro 175 million to Euro 213 million, equivalent to year-on-year growth of 22 percent. Sales grew from Euro 3.4 billion to Euro 4.1 billion and were thus 19 percent higher than in the previous year. "These are satisfactory results for our group of companies", underlined Dr. Müller. "They were driven on the one hand by our new plants and shareholdings and on the other hand by maintaining our efforts to cut costs and enhance efficiency across all areas of our Group."
In parallel with its sales and adjusted EBIT, MVV Energie reported improvements in all other key earnings figures in its 2016 financial year. Net of the adjusted financial result, pre-tax earnings (adjusted EBT) rose by Euro 7 million to Euro 139 million. Profit, i.e. adjusted annual net income after minority interests, grew year-on-year by Euro 20 million to Euro 95 million. This corresponds to earnings per share of Euro 1.45, as against Euro 1.14 in the previous year.
Positive outlook for 2017
MVV Energie maintained this positive earnings performance in the 1st quarter of its current 2017 financial year (1 October - 31 December 2016). Operating earnings grew year-on-year from Euro 103 million to Euro 115 million, while sales rose from Euro 940 million to around Euro 1.1 billion. According to Dr. Müller, "this strong start to the year" was due on the one hand to cooler weather conditions accompanied by higher heating energy turnover and on the other to higher availability levels at power plants and facilities following several scheduled inspection measures in the previous year’s period. These factors more than off-set the effects of lower wind volumes. Like in the previous year, earnings in the current year were also held back by higher transport costs resulting from low water levels on the Rhine.
The company has confirmed its earnings forecast for the financial year as a whole. Accordingly, from an operating perspective MVV Energie expects to achieve slight growth both in its sales and in its operating earnings.
The Supervisory and Executive Boards are proposing an unchanged dividend of 90 cents per share for the past 2016 financial year. The distribution total will thus once again amount to Euro 59.3 million, while the dividend yield based on the share price at the balance sheet date on 30 September 2016 will amount to a robust 4.5 percent.