MVV posts stable earnings in volatile market climate and confirms forecast
Mannheim energy company MVV maintains high level of earnings despite challenging market situation – Operating earnings stable at Euro 92 million in first quarter of 2022 financial year – Forecast for operating business performance in 2022 confirmed – MVV’s CEO, Dr. Georg Müller: “We support the approach to climate protection taken by the Federal Government, which is necessary and appropriate.”
Mannheim-based energy company MVV Energie AG (ISIN: DE000A0H52F5; WKN: A0H52F) upon publication of the company’s results for the 1st quarter of the 2022 financial year (1 October 2021 – 31 December 2021). “Our stable operating earnings in the first three months show that in the 2022 financial year we have latched seamlessly onto the high earnings achieved in the previous year. Despite the coronavirus pandemic and volatile conditions on energy markets, we have thus been able to maintain our successful course.”
At around Euro 1.3 billion, adjusted sales were 31 percent higher than in the previous year. Alongside higher electricity volumes, this growth was due above all to the rise in wholesale prices for electricity and gas. The company’s CEO explained: “Procurement costs on the electricity and fuel markets have been rising sharply for months now. Thanks to our long-term procurement strategy, we have been able to cushion the effects of the price rally on wholesale energy markets for our customers.” This was true above all for existing customers, he continued: “We managed to leave end customer prices for electricity unchanged as of 1 January 2022 and only raised our gas prices slightly. For new customers, basic and substitute supplies were naturally affected by the volatility on the energy markets and higher wholesale prices, as we had to procure additional electricity and gas for them at short notice. Despite that, we were also able to limit the necessary price changes.” MVV’s CEO specifically emphasised that “the MVV Group’s pleasing earnings are not the result of customer price increases”.
At Euro 92 million, the company’s earnings (adjusted EBIT) almost matched the very strong figure reported for the previous year (Euro 98 million). Earnings benefited from slightly cooler weather conditions compared with the previous year, as well as from higher plant availability and a strong performance in MVV’s environmental energy and wind power businesses. By contrast, operating earnings were adversely affected by lower plant availability in the power plant business and by the project development business, which is inherently volatile. In the previous year, quarterly earnings had been positively influenced by the first-time full consolidation of Fernwärme Rhein-Neckar GmbH. Excluding this item, operating earnings for the past quarter would even have slightly exceeded the previous year’s figure.
Based on these pleasing results, MVV can confirm its full-year earnings forecast. From an operating perspective, the company expects its adjusted EBIT to show a moderate increase compared with the already strong level reported for the previous year. MVV has thus affirmed that the substantial earnings growth in the previous year was not a one-off effect and that there is further potential in this respect.
Ongoing high pace of investment
“Germany intends to and indeed has to make up for lost time when it comes to climate protection”, confirmed Dr. Müller. That was apparent in the Coalition Agreement for the new Federal Government and the current climate action status presented by the Federal Ministry for Economic Affairs and Climate Action in its Immediate Climate Action Programme. “The new regulatory measures are due to take effect at the end of 2022 already. That is also necessary if the electricity and heat turnarounds are to gain further momentum on the ground. With our target of becoming climate positive from 2040 and our continuing high pace of investment in the energy turnaround, we are supporting this course taken by the new Federal Government with our own initiatives”, declared MVV’s CEO.
To this end, MVV invested a further total of nearly Euro 90 million in the first three months of the 2022 financial year. The energy company also successfully completed one of its major projects at the end of January 2022 and launched operations at the energy from waste plant in the Scottish city of Dundee, one of the most modern plants of its kind in Europe.
Credible start made by the Federal Government in terms of climate protection
Dr. Müller also pointed out that the target of achieving 50 percent climate neutrality for Germany’s heat supply by 2030 remained ambitious. After all, renewable energies currently accounted for just 15 percent of the country’s heat market. The Immediate Climate Action Programme set out initial measures targeting some of the relevant gaps in the Coalition Agreement and suitably addressed the expansion and decarbonisation of heat grids.
“Overall, the combination of Coalition Agreement and Immediate Climate Action Programme represent a credible start by the Federal Government. Their success will depend above all on whether the government manages to provide top-down coordination for its core ‘energy turnaround’ project even though this will largely be implemented on a decentralised basis. Not only that: With its Skilled Labour Initiative, the government will need to ensure that the energy turnaround can also be implemented on a practical level”, stated MVV’s CEO in conclusion.
The complete quarterly statement is available online at www.mvv.de/investors.
MVV in Figures
|Financial key figures||1 Oct 2021 to 31 Dec 2021||1 Oct 2020 to 31 Dec 2020||% change|
|Sales and earnings|
|Adjusted sales excluding energy taxes (Euro million)||1,291||983||+ 31|
|Adjusted EBITDA1 (Euro million)||143||147||- 3|
|Adjusted EBIT1 (Euro million)||92||98||- 6|
|Adjusted net income for period1 (Euro million)||56||60||- 7|
|Adjusted net income for period after minority interests1 (Euro million)||44||47||- 6|
|Adjusted total assets at 31 December 2021/30 September 20212 (Euro million)||5,974||5,815||+ 3|
|Adjusted total assets excluding margins at 31 December 2021/30 September 20212, 3 (Euro million)||5,344||4,994||+ 7|
|Adjusted equity at 31 December 2021/30 September 20212 (Euro million)||1,708||1,662||+ 3|
|Adjusted equity ratio at 31 December 2021/30 September 20212 (%)||28,6||28,6||0|
|Adjusted equity ratio excluding margins at 31 December 2021/30 September 20212, 3 (%)||32,0||33,3||- 4|
|Net financial debt at 31 December 2021/30 September 2021 (Euro million)||1,039||628||+ 65|
|Net financial debt excluding margins at 31 December 2021/30 September 20213 Euro million)||1,668||1,450||+ 15|
|Cash flow and investments|
|Cash flow from operating activities (Euro million)||- 289||68||-|
|Cash flow from operating activities excluding margins3 (Euro million)||- 97||26||-|
|Investments (Mio Euro)||89||71||+ 25|
|Adjusted earnings per share1 (Euro)||0.66||0.71||- 7|
|Non-financial key figures|
|Electricity generation capacity from renewable energies at 31 December 2021/30 September 2021 (MWe)||569||564||+ 1|
|Electricity generation volumes from renewable energies (kWh million)||339||310||+ 9|
|Completed development of new renewable energies plants (MWe)||57||234||- 76|
|Operations management for renewable energies plants (MWel)||3,698||3,849||- 4|
|Number of employees at 31 December 2021/31 December 2020 (headcount)||6,568||6,292||+ 4|
|Number of trainees at 31 December 2021/31 December 2020 (headcount)||332||334||- 1|
1 Excluding non-operating measurement items for financial derivatives and including interest income from finance leases
2 Excluding non-operating measurement items for financial derivatives
3 Excluding collateral deposited at MVV for counterparty default risks (margins)