MVV Energie plans to rethink energy
Conversion of energy supply along ecological lines requires new approach to energy - Low generation margin, mild winter, damaged turbine at joint power plant in Kiel and high investments lead to reduction in earnings - Full-year outlook confirmed
Mannheim-based energy company MVV Energie (WKN: A0H52F, ISIN: DE000A0H52F5) sees a "new energy approach" as the key precondition for successfully converting the energy supply along eco-logical and sustainable lines in the coming years. Upon the presentation of the financial report for the 1st half of the current 2011/12 financial year (1 October - 31 March 2012) in Mannheim on Wednesday, company CEO, Dr. Georg Müller, stressed that MVV intended to assume a pioneering role - and that without any ifs or buts - with its corporate strategy focused on expanding renewable energies and enhancing energy efficiency. "Renewable energies will gradually assume the leading role within the future energy system, while energy efficiency is set to become an ever more important factor". The company is therefore making targeted investments in onshore wind power, biomass, biogas, cogeneration, district heating and in the environmentally-friendly generation of energy from waste.
Dr. Müller: "We have set course and are making good progress." In the first six months, the company more than doubled its investments from Euro 67 million in the previous year's period to Euro 145 million. Just last weekend, the Group officially launched operations in the presence of Kurt Beck, state premier of Rheinland/Pfalz, with the 23 turbines at a wind farm located in Kirchberg in the Hunsrück region. This, south-west Germany's highest output wind farm, is a joint venture between the Group's Energieversorgung Offenbach subsidiary and the Wörrstadt-based company juwi. In Klein Wanzleben (Sachsen-Anhalt), MVV Energie's first biomethane plant is due to be linked up to the grid in September.
These rising investments are also one of the main reasons why the Group will not be able in the current and coming financial years to maintain its earnings at the record levels seen in the past two years. Comments Dr. Müller: "It is clear that these high volumes of investment in the future, with their customary start-up costs, will only be able to generate positive EBIT contributions once operations have been launched." Furthermore, the Group's earnings have also been influenced by the low generation margin, the so-called clean dark spread (CDS).
Two additional one-off items also had negative implications in the current financial year. On the one hand, very mild weather conditions in the winter months led to a marked reduction in heating energy and gas turnover at all locations. In the Sales and Services reporting segment, heating energy and gas turnover fell by 16 percent and 11 percent respectively. On the other hand, the four months of downtime at the joint power plant in Kiel due to turbine damage alone reduced earnings by more than Euro 10 million.
Slight sales growth, lower earnings
Given this underlying framework, the results achieved by MVV Energie in the period from October 2011 and March 2012 can, according to the company CEO, be termed satisfactory. Driven by increased trading volumes, as well as by continuing success in the nationwide energy sales business and higher revenues from the direct marketing of electricity from renewable energies, the company managed to boost its sales year-on-year by 10 percent from Euro 1.9 billion to almost Euro 2.1 billion. At the same time, the adjusted EBIT of Euro 180 million for the first half of 2011/12 were around 12 percent down on the previous year's figure.
Expectations for full year confirmed
The company is upholding the outlook already published in December for the full 2011/12 financial year. MVV Energie thus aims to generate slightly higher sales than the previous year's figure of Euro 3.6 billion. In terms of adjusted EBIT, the group of companies with municipal and regional roots aims to post operating earnings of around Euro 220 million, and can thus confirm its previous forecast of generating earnings with a slight reduction in a single-digit per-centage range. Comments Dr. Müller: "We are thus upholding our ambitious target."
Note: the complete financial report for the 1st half of the 2011/12 financial year 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 31 March 2012
|Euro million||2011/12||2010/11||% change|
|Sales excluding electricity and natural gas taxes 1||2 090||1 901||+ 10|
|Adjusted EBITDA1, 2||260||280||- 7|
|Adjusted EBITA2||180||204||- 12|
|Adjusted EBIT3||180||204||- 12|
|Adjusted EBT3||148||173||- 14|
|Adjusted net surplus for period 3||101||117||- 14|
|Adjusted net surplus for period after minority interests3||87||98||- 11|
|Adjusted earnings per share 3 in Euro||1.32||1.49||- 11|
|Cash flow before working capital and taxes 1||261||274||- 5|
|Cash flow before working capital and taxes per share 1 in Euro||3.96||4.16||- 5|
|Free cash flow||- 237||26||-|
|Adjusted total assets at 31.3.2012 / 30.9.2011 1, 4||4 009||3 658||+ 10|
|Adjusted equity at 31.3.2012 / 30.9.20114||1 403||1 378||+ 2|
|Adjusted equity ratio at 31.3.2012 / 30.9.2011 1, 4||35.0%||37.7%||- 7|
|Number of employees at 31.3.2012 / 31.3.2011||5 873||5 909||- 1|
|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|