MVV remains on course and maintains high pace of investment
Mannheim energy company confirms earnings forecast after third quarter: MVV expects slight year-on-year operating earnings growth in 2018 financial year – High pace of investment to generate growth and safeguard supply reliability
“A brief glance at our operating business performance shows that MVV has the right strategic approach in what are still challenging conditions.” According to Dr. Georg Müller, CEO of MVV (WKN: A0H52F, ISIN: DE000A0H52F5), the Mannheim-based energy company is still on course. When presenting MVV’s results for the first nine months of the 2018 financial year (1 October 2017 – 30 June 2018), Dr. Müller focused in particular on MVV’s innovations and investments in new business fields and trailblazing projects. These are key components of the company’s strategy and are intended to secure its future operating capacity and sustainable growth.
MVV invested a total of Euro 214 million in the past nine months, around two thirds more than in the previous year’s period. One of the largest individual projects is just around the corner in Mannheim – at its Friesenheimer Insel location, MVV is channelling around Euro 100 million into connecting the combined heat and power plant to the district heating grid and building a new culvert under the Old Rhine, as well as integrating a phosphorous recycling plant. Further current investment focuses include building a new highly efficient combined heat and power plant in Dundee in Scotland, building a state-of-the-art gas-fired combined heat and power plant in Kiel and acquiring an organic waste fermentation plant in Dresden. Comments Dr. Müller: “We will be maintaining a high pace of investment in future as well. This forms the basis for our growth and for ensuring supply reliability. Our longstanding partnerships with local authorities and regional business provide us with firm foundations in this respect.”
The company successfully maintained its robust business performance in the nine months from October 2017 to June 2018. In particular, the “New Energies” segment, where MVV pools its renewable and environmental energy businesses, showed clear advances in terms of its operations. The volume of electricity generated from renewable energies, including the biogenic share of waste, rose by 18 million kilowatt hours to 907 million kilowatt hours in the first nine months of the current financial year. This corresponds to the average annual consumption of around 260,000 three-person households.
At Euro 232 million, adjusted EBIT for the nine-month period under report fell short of the previous year’s figure. This was due to operating factors including several scheduled inspection measures performed at generation plants in the environmental energy business between April and June. In the 2017 financial year, the predominant share of this work was only performed in the 4th quarter. This factor will thus be cancelled out on a full-year basis. Due to a market-related dip in electricity and gas trading volumes, the company’s nine-month sales showed only a slight reduction from Euro 3.1 billion to Euro 3.0 billion.
Positive outlook for 2018 confirmed
At the end of the first nine-months, the company confirmed its positive outlook for the 2018 financial year. From an operating perspective, MVV therefore expects its adjusted EBIT for 2018 to slightly exceed the previous year’s figure. In 2017, the group of companies generated operating earnings of Euro 224 million. Earnings will benefit, among other factors, from improvements in the environmental energy business and increased revenues from proprietary wind turbines, as well as from the company’s success in enhancing its cost efficiency. These factors will offset weatherrelated downturns due to the milder winter and the regulatory reduction in grid fees. By contrast, various one-off items will neutralise each other and therefore not have any notable impact on Adjusted EBIT for the current financial year. In terms of its sales, MVV expects to more or less match the previous year’s figure of four billion euros in the 2018 financial year.
Looking at the prospects for MVV’s own operations further down the line, CEO Dr. Müller stressed that, all in all, the company’s earnings performance had become more volatile. “That too is in keeping with the conditions in which we have to operate.” According to Dr. Müller, the energy turnaround and associated challenges and opportunities for new business models required greater flexibility, an active willingness and ability to manage change, and a clear customer and project focus.
|MVV in Figures|
|Euro million||1 Oct 2017|
to 30 Jun 2018
|1 Oct 2016|
to 30 Jun 2017
|Sales excluding energy taxes||2,966||3,138||- 5|
|Adjusted EBITDA1||389||381||+ 2|
|Adjusted EBIT1||232||250||- 7|
|Adjusted net income for period 1||130||146||- 11|
|Adjusted net income for period after minority interests1||109||125||- 13|
|Adjusted earnings per share 1 (Euro)||1.66||1.90||- 13|
|Cash flow from operating activities||212||256||- 17|
|Cash flow from operating activities per share (Euro)||3.22||3.89||- 17|
|Adjusted total assets (at 30 Jun 2018 / 30 Sep 2017)2||4,223||4,248||- 1|
|Adjusted equity (at 30 Jun 2018 / 30 Sep 2017)2||1,560||1,490||+ 5|
|Adjusted equity ratio (at 30 Jun 2018 / 30 Sep 2017)2||36.9%||35.1%||+ 5|
|Net financial debt (at 30 Jun 2018 / 30 Sep 2017)||1,119||1,077||+4|
|Total investments||214||128||+ 67|
|of which growth investments||101||46||>+ 100|
|of which investments in existing business||113||82||+ 38|
|Number of employees (at 30 Jun 2018 / 30 Jun 2017)||5,949||5,987||- 1|
|1||Excluding non-operating measurement item for financial derivatives, excluding structural adjustment for part-time early retirement and including interest income from finance leases|
|2||Excluding non-operating measurement item for financial derivatives|