MVV Energie sets its sights on more far-reaching reform to green electricity subsidies

The Mannheim-based energy company MVV Energie (WKN: A0H52F, ISIN: DE000A0H52F5) welcomes the Amendment to the German Renewable Energies Act (EEG) as the prelude to more far-reaching reform of green electricity subsidies. According to MVV Energie's CEO, Dr. Georg Müller, the Federal Government has "steered the expansion in renewable energies along lines that make sense in both ecological and economic terms, while at the same time boosting cost efficiency and competition". At the presentation of the company's financial report for the first nine months of the current 2013/14 financial year (1 October 2013 - 30 June 2014) in Mannheim on Friday, Dr. Müller added that these measures would now have to be followed up in the next round with the Amendment to the German Combined Heat and Power Act (KWKG) and the introduction of a competitive capacity market, one not restricted to specific technologies, for conventional power plants.

Alongside developments in the energy industry, where generation prices witnessed a further decline, the company's business performance between October 2013 and June 2014 was affected above all by very mild weather conditions throughout the winter. This led to the downturn in sales and earnings expected and already announced by MVV Energie in the course of the year. Sales for the period from October through to the end of June thus reduced year-on-year by seven percent to Euro 3.0 billion, while adjusted operating earnings (adjusted EBIT) dropped by 15 percent to Euro 185 million.

Measured in terms of so-called degree day figures across all of the MVV Energie Group's locations, it was around 18 percent warmer in the first nine months of the current financial year than in the previous year's comparative period. The Group's heating energy and gas turnover in its "Sales and Services" segment showed a corresponding reduction of 17 percent. This was one of the key reasons for the decline in earnings.

One of the market-oriented pioneers in the German energy industry
At the same time, the Mannheim-based group of companies has upheld the high tempo of its investment programme in recent months as well. Overall, MVV Energie invested Euro 243 million between October 2013 and June 2014. Of this total, Euro 176 million alone involved growth investments, while a further Euro 67 million was channelled into modernising plants and grids.

"We intend to be one of the market-oriented pioneers in the German energy industry in future as well", stressed Dr. Müller. "With our investments, we are laying a foundation for further sustainable, profitable growth." He therefore announced that the company would be continuously raising the share of electricity generation from renewable energies in its generation portfolio in future too, as well as making further targeted investments in expanding environmentally-friendly district heating and the generation of energy from waste. In the Group's sales activities, he sees key focuses in the development of innovative energy efficiency solutions and energy-related services, as well as new business models for decentralised energy management.

Earnings forecast affirmed and specified
For its full-year earnings, the company has affirmed its existing forecast of posting adjusted operating earnings in the lower third of a range from Euro 170 million to Euro 185 million, and has now specified that MVV Energie expects to generate adjusted EBIT of between Euro 170 million and Euro 175 million. In terms of its annual sales, the company expects to report sales at around the previous year’s level of approximately four billion euros.