MVV: Strong business performance with #climatepositive course
Exceptional performance of renewable energies marketing and trading business has further positive impact on third quarter of 2023 financial year – MVV implements its first #climatepositive plant
“Our strong business performance in the first half continued in the third quarter of our current financial year as well”, explained Dr. Georg Müller, Chief Executive Officer of the Mannheim-based energy company MVV Energie AG (ISIN: DE000A0H52F5; WKN: A0H52F), upon publication of the results for the first nine months of the 2023 financial year. In a challenging environment, MVV managed to significantly improve both its sales and its earnings in the period from 1 October 2022 to 30 June 2023.
At around Euro 5.8 billion, MVV’s adjusted sales were 59 percent higher in the period under report than in the previous year (Euro 3.7 billion). This increase was chiefly due to wholesale electricity and gas prices, which were higher than in the previous year’s period. The renewable energies project development business also generated sales growth.
MVV’s earnings performance was driven by all operating segments. At Euro 710 million, operating earnings excluding disposal gains were significantly higher than the equivalent figure for the previous year (Euro 265 million). As in the first half of the financial year, the Commodities business field, i.e. the company’s activities in marketing renewable energies, and trading posted an exceptionally strong performance. Here, MVV benefited from its good portfolio of solar and wind power while maintaining a conservative approach to risk management. The company was able to generate substantial additional revenues from these extra volumes and by exploiting price volatilities. At the same time, conventional energy trading also had a positive impact within the company’s portfolio management.
The renewable energies project development business confirmed the strong start to the year. Alongside two large solar projects in the USA, MVV’s Juwi subsidiary is currently implementing a solar park in Japan. It also sold the rights to a windfarm in South Africa, in which country alone Juwi has now built up a project pipeline of 400 megawatts. In Germany, Juwi is also currently planning the construction of the largest windfarm in North Rhine-Westphalia. With a capacity of more than 260 megawatts, this should supply green electricity to more than 150,000 households from the end of 2028. Moreover, the company is supporting plant operators in optimising existing older plants by revamping and thus raising the performance capacity of existing parks. MVV is also stepping up its marketing of green electricity volumes via long-term supply agreements, known as power purchase agreements (PPAs).
In its generation activities, the non-availability of capacity at a shareholding had a less marked financial impact than in the previous year. Furthermore, a previously planned inspection was postponed, which generated additional earnings. “Here, however, the positive impact on earnings will reverse once the inspection is performed in the further course of the year”, added Dr. Müller.
Forecast for 2023 financial year confirmed
Given its earnings performance to date and its expectations for the fourth quarter of the current financial year, MVV confirmed its earnings forecast for the 2023 financial year. The company had raised this in its half-year reporting. Dr. Müller: “From an operating perspective, we still without amendment expect adjusted EBIT excluding disposal gains to amount to between Euro 650 million and Euro 720 million. In the event of a further stabilisation in the energy markets and assuming that no setbacks arise due to macroeconomic factors, we even see opportunities for our operating earnings to exceed the forecast range.”
Political framework required for future of gas grids
With regard to the future of climate-friendly heating in Germany and the associated debate, MVV’s CEO confirmed that district heat would be the first choice for the climate-friendly heat supply in large built-up areas in future. To this end, a national average of at least 50 percent of district heat should result from climate-neutral generation by 2030. “At MVV, we will beat this target in Mannheim and its surrounding region and in Offenbach. Here, we will supply 100-percent green heat by 2030, with Kiel set to follow no later than 2035”, explained Dr. Müller and stressed: “For this once-in-a-century task to succeed, the infrastructure will also have to be fully converted to green energy. That also applies to the transformation in gas distribution grids which, by the time at which the heat supply is fully decarbonised, will have to be either converted to green gases or decommissioned.” Although very little time remained before these measures would have to be implemented, no bespoke political framework was yet in place for either of these options for the future. MVV has outlined how this framework should be structured in its current study: “Future of the Gas Grids”. This is available on the internet at mvv.de/gasnetzstudie.
According to MVV’s CEO, the legislative processes currently underway offered the opportunity to sensibly dovetail the law on municipal heat planning and the amendment to the German Building Energy Act (GEG) to make a success of the heat transition. Moreover, there was an urgent and substantial need for reform, particularly in energy industry law, concession law and the incentive regulation ordinance. Explained Dr. Müller: “Ultimately, we must obtain a set of regulations that successfully addresses the sometime conflicting needs for investment reliability on the one hand and openness to as many types of climate-neutral heat supply as possible on the other.” Over and above that, there was a need for people capable of putting the heat transition into practice on a technical level. What was needed ere was a broad-based training and specialist recruitment campaign. MVV had been committed to this for many years now by offering widely recognised, highly qualified training and would be further expanding this initiative.
MVV implements its first #climatepositive plant
“Instead of waiting for political decisions or promotional financing, we are already putting our #climatepositive plans into action”, stressed MVV’s CEO. That applied just as much to the heat transition as to the electricity transition and MVV’s customer solutions. Together, these form the pillars of MVV’s Mannheim Model and show how the energy company intends to become #climatepositive by 2040 at the latest. “This will require us not only to reduce our emissions but also to actively remove CO2 from the atmosphere and permanently capture, use or store this”, announced the CEO and continued: “Our biomass and energy from waste plants are the key to our #climatepositive future.”
In Dresden, this is already a reality: At the bio-waste anaerobic digestion plant there, MVV has for the first time now stored captured and liquefied CO2. This greenhouse gas is used for concrete recycling and permanently removed from the atmosphere by being stored in demolition concrete. In Mannheim, MVV is also working on a pilot project in which CO2 is to be captured from flue gas resulting from waste treatment and its biomass power plant and subsequently used.
The complete quarterly statement is available online at www.mvv.de/investors.
|MVV in Figures|
|1 Oct 2022|
to 30 Jun 2023
|1 Oct 2021|
to 30 Jun 2022
|Financial key figures|
|Sales and earnings|
|Adjusted sales excluding energy taxes (Euro million)||5,800||3,653||+ 59|
|Adjusted EBITDA1 (Euro million)||995||476||>+ 100|
|Adjusted EBITDA excluding disposal gains1 (Euro million)||860||421||>+ 100|
|Adjusted EBIT1 (Euro million)||845||320||>+ 100|
|Adjusted EBIT excluding disposal gains1 (Euro million)||710||265||>+ 100|
|Adjusted net income for period1(Euro million)||577||213||>+ 100|
|Adjusted net income for period after minority interests1 (Euro million)||511||145||>+ 100|
|Adjusted total assets at 30 June 2023/30 September 20222 (Euro million)||6,066||6,888||+ 12|
|Adjusted total assets excluding margins at 30 June 2023/30 September 20222 3 (Euro million)||5,855||5,434||+ 8|
|Adjusted equity at 30 June 2023/30 September 20222 (Euro million)||2,370||1,863||+ 27|
|Adjusted equity ratio at 30 June 2023/30 September 20222 (%)||39.1||27.1||+ 44|
|Adjusted equity ratio excluding margins at 30 June 2023/30 September 20222 3 (%)||40.5||34.3||+ 18|
|Net financial debt at 30 June 2023/30 September 2022 (Euro million)||890||32||>+ 100|
|Net financial debt excluding margins at 30 June 2023/30 September 20223 (Euro million)||998||1,449||- 31|
|Cash flow and investments|
|Cash flow from operating activities (Euro million)||– 816||262||-|
|Cash flow from operating activities excluding margins3 (Euro million)||493||41||>+ 100|
|Investments (Euro million)||227||224||+ 1|
|Adjusted earnings per share1 (Euro)||7.76||2.20||>+ 100|
|Non-financial key figures|
|Electricity generation capacity from renewable energies at 30 June 2023/30 September 20224 (MWe)||625||614||+ 2|
|Electricity generation volumes from renewable energies5 (kWh Million)||1,077||1,030||+ 5|
|Completed development of new renewable energies plants (MWe)||1,331||385||>+ 100|
|Operations management for renewable energies plants (MWe)||3,691||3,665||+ 1|
|Number of employees at 30 June 2023/30 June 2022 (headcount)||6,315||6,500||- 3|
|Number of trainees at 30 June 2023/30 June 2022 (headcount)||252||273|
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 for counterparty default risks (margins)
4 Including electricity generation capacity from wind turbines for repowering at 30 June 2023 (28 MW)/30 September 2022 (30 MW)
5 Including electricity generation volumes from wind turbines for repowering at 30 June 2023 (25 million kWh)/30 June 2022 (17 million kWh)