MVV Energie to build further on renewable energies and combined heat and power generation
Mannheim energy company to invest a further Euro 3 billion in future energy system in years ahead - Dip in earnings now overcome - Positive outlook
The Mannheim-based energy company intends to invest heavily in the energy system of the future in the coming years as well. Having already invested a record Euro 470 million in the past financial year - the highest volume of investment in its history - the company plans to channel a further Euro 3 billion into expanding renewable energies, boosting energy efficiency and modernising and maintaining its existing grids and plants. This was announced by MVV Energie's CEO, Dr. Georg Müller, at this year's Annual General Meeting, which was held in Congress Center Rosengarten in Mannheim on Friday. "We are not just sitting back and admiring what we have already achieved. We will press ahead with building further growth and sustainably linking renewable and conventional energies along the entire energy industry value chain."
Dr. Müller is convinced that the German energy turnaround still harbours more opportunities than risks. The CEO stressed to shareholders that Germany, with its technical expertise, economic strength and broad-based consensus in support of converting the energy supply, had the potential to become a model project. "And that in turn could make the energy turnaround into a 'made in Germany' export hit", he added.
What counted now was "not to throttle the up-and-running motor of renewable energies expansion." Germany should rather maintain the pace of expansion and extend its targets with a due sense of commitment and ambition. In view of this, MVV Energie's CEO spoke out in favour of raising the expansion target for the share of the nationwide electricity mix contributed by renewables from its current level of 45 percent to 55 percent. Commented Dr. Müller: "We can achieve that without increasing the tempo. We just need to keep our feet off the brakes."
The company is therefore calling for corresponding adjustments in future subsidies for renewable energies, which are to be converted to a competitive tender model. In particular, on-shore wind power - the most economical form of renewable energies - should be further expanded throughout Germany.
A regional model, such as that also proposed by the Federal Council, was the best way to offset fluctuations while also reducing the need for grid expansion. "Onshore wind power is the key driver and the workhorse of the energy turnaround," explained Dr. Müller. The expansion corridor for new onshore wind turbines should therefore be retained at 2,500 megawatts on a net basis, i.e. excluding investments in repowering, with due account being taken of locations with good wind conditions in the south and middle of Germany. “"ecentralised energies should be precisely that."
MVV Energie is also in favour of further expanding combined heat and power (CHP) generation in conjunction with environmentally-friendly district heating. When heading for the energy system of the future, it was not a matter of either renewables or conventional energies or of either decentralised or centralised generation. What counted above all was systematically linking these forms of generation. CHP also acted as an important link between the electricity and heating energy markets. "To succeed, the energy turnaround needs a heating energy turnaround", added Dr. Müller. Particularly in conurbations and large cities, district heating from CHP was therefore the best solution and a guarantee of efficiency in future as well.
Dip in earnings now overcome – Positive outlook for the year
The CEO pointed out that in the past 2014/15 financial year the Mannheim-based energy company had successfully increased its operating earnings (adjusted EBIT) by 3 percent from Euro 170 million to Euro 175 million. "By consistently implementing our sustainability-driven strategy we achieved the target we had previously announced of overcoming the dip in earnings seen in recent years", stressed the company’s CEO. With sales of Euro 3.4 billion, the group of companies had also met its sales target.
MVV Energie also maintained this positive earnings performance in the 1st quarter of the current 2015/16 financial year (1 October - 31 December 2015), with operating earnings rising year-on-year from Euro 64 million to Euro 103 million. This pleasing performance was driven above all by the two new UK power plants and by the figures at Juwi, the Rhineland-Palatinate-based renewable energies project developer in which MVV Energie has held a majority stake for just over a year. Due to seasonal factors, most plants in the project development business are completed and invoiced in the months from October to December. The predominant share of annual earnings is also generated in this period. By contrast, the period from January to September is characterised by material and personnel expenses.
The new renewable energies plants at which operations were launched during the past year - new windfarms and the two new biomethane plants in Stassfurt and Barby - also contributed positively to earnings, as did higher wind volumes compared with the previous year. "On the one hand, we are and remain in savings mode in terms of maintaining strict limits on our spending. On the other hand, we are now also harvesting the fruits of our labours in recent years," concluded Dr. Müller.
For the financial year as a whole, the company has confirmed the positive outlook contained in its earnings forecast. Accordingly, from an operating perspective MVV Energie expects its adjusted EBIT to rise by around 15 percent. MVV Energie also expects its sales to increase to more than Euro 4 billion in this financial year.
The Supervisory and Executive Boards are proposing an unchanged dividend of 90 cents per share for the past 2014/15 financial year for approval by the Annual General Meeting. The distribution total will thus once again amount to Euro 59.3 million.