Renewable energies provide MVV with tailwind
Operating earnings rise to Euro 133 million in 1st quarter of 2018 financial year - Sales increase by 4 percent to more than Euro 1.1 billion - New reporting structure underlines significance of customer needs and renewable energies - Forecast for 2018 confirmed
Tailwind - quite literally - helped the Mannheim-based energy company MVV (WKN: A0H52F, ISIN: DE000A0H52F5) to increase its sales and earnings in the three months from October to December 2017 and thus ensured a good start to the new 2018 financial year (1 October 2017 – 30 September 2018). As announced by MVV at the presentation of its quarterly statement in Mannheim on Thursday, in the 1st quarter of the financial year the company increased its operating earnings (adjusted EBIT) from Euro 115 million to Euro 133 million and its sales by 4 percent to more than Euro 1.1 billion.
According to MVV’s CEO, Dr. Georg Müller, this positive earnings performance was driven in particular by high electricity feed-in volumes from the company’s own wind turbines due to strong wind volumes, as well as by the successful performance of the renewable energies project development business in the 1st quarter. Furthermore, the company also benefited from positive one-off items in the 1st quarter. Comments Dr. Müller: “We maintained our growth course once again in the 1st quarter of the 2017 financial year. Against a backdrop of ongoing challenges presented by the energy policy and industry framework, we are seizing the opportunities resulting from the associated process of fundamental change to generate growth at our company.”
Positive outlook for 2018 confirmed
Alongside growth in its sales and adjusted EBIT, MVV can also report an increase in its earnings before interest, taxes, depreciation and amortisation (adjusted EBITDA) for the 1st quarter of the current financial year. This operating earnings figure increased from Euro 158 million to Euro 177 million. Adjusted net income for the period after minority interests grew year-on-year by Euro 8 million to Euro 69 million. That corresponds to earnings per share of Euro 1.05, as against Euro 0.93 in the previous year’s quarter.
The company has confirmed its positive outlook for the 2018 financial year as a whole. MVV thus expects to achieve slight growth both in sales and in operating earnings. In the previous year, the company generated adjusted EBIT of Euro 224 million. Its sales in the past financial year totalled Euro 4.0 billion.
New reporting structure introduced
To take adequate account of the company’s alignment to its customers’ needs and to supply reliability, as well as of the growing importance of renewable energies and energy efficiency in its own business, MVV adjusted its reporting structure as of the beginning of the current 2018 financial year. The company is still managed in five reporting segments to which the various business fields are allocated. The new “Customer Solutions” reporting segment will in future present the commodity business and MVV’s sales positions. This segment thus comprises both the retail and business customer business with electricity, heating energy, gas and water, as well as the solutions business for corporate customers and the services and trading business at the MVV Trading subsidiary. In the 1st quarter of 2018, MVV raised its sales in this segment year-on-year from Euro 781 million to Euro 811 million and its adjusted EBIT from Euro 30 million to Euro 33 million.
All aspects of the renewable energies business are allocated to the new reporting segment “New Energies”. This therefore comprises the wind turbines, biomass and biomethane plants, project development and operations management activities and the energy from waste plants. Segment sales here rose from Euro 212 million to Euro 221 million in the first three months of the current financial year. In terms of earnings, “New Energies” is already the top-performing segment at the Mannheim-based group of companies. Earnings for the 1st quarter came to Euro 46 million, as against Euro 37 million in the previous year’s period.
Another newly tailored reporting segment is “Supply Reliability”, which presents conventional energy generation and the grid business. This segment thus comprises combined heat and power generation, grid facilities and further facilities to provide customers with a secure supply of electricity, heating energy, gas and water. First-quarter sales here rose from Euro 59 million to Euro 61 million, while operating earnings grew from Euro 33 million to Euro 41 million.
The two reporting segments “Strategic Investments” and “Other Activities” remained virtually unchanged. In terms of their sales and earnings, their performance was also largely consistent with the previous year.
Investments in the future
“With our corporate strategy, we are consistently aligning our MVV to the energy system of the future”, stressed company CEO, Dr. Müller. “We have been investing in the further expansion of renewable energies, in energy efficiency and in innovative and forward-looking products and services for years now and will be investing a further Euro 3 billion in the years ahead”. MVV invested Euro 104 million in the 1st quarter of the current financial year, 79 percent more than in the previous year’s period. Alongside the new gas-powered CHP plant in construction at Stadtwerke Kiel, a company which forms part of the MVV Group, the largest individual projects also include acquisitions of interests in companies to extend the range of services offered to industrial and SME customers and the takeover of an energy from waste plant in the Scottish city of Dundee. Here, MVV is building a new, highly efficient CHP plant in the direct vicinity of the existing plant. This involves a total investment of Euro 135 million and will commence operations in 2020.
In parallel, MVV has begun preparations in Mannheim for connecting its CHP plant on Friesenheimer Insel to its own regional district heating grid. Comments Dr. Müller: “We are developing this location into a component of the energy turnaround and of a sustainable closed-circuit economy for the City of Mannheim and the Rhine-Neckar Metropolitan Region.” By linking up the plant to the district heating grid, which also supplies the towns of Heidelberg, Schwetzingen and Speyer, the environmentally-friendly district heating supply is also set to become more renewable. The primary energy factor (PEF) for the district heating supplied will fall by a third, a significant development for property owners, construction clients and investors alike. At the same time, MVV is extending the CHP plant to include a facility for recycling phosphorous from sewage. Overall, the company will be investing around Euro 100 million for this in Mannheim alone in the years ahead.
|Key figures of the MVV Energie Group|
|Euro million||1 Oct 2017 to 31 Dec 2017||1 Oct 2016 to 31 Dec 2016||% change|
|Sales excluding energy taxes||1,125||1,084||+ 4|
|Adjusted EBITDA1||177||158||+ 12|
|Adjusted EBIT1||133||115||+ 16|
|Adjusted net income for period1||85||72||+ 18|
|Adjusted net income for period after minority interests1||69||61||+ 13|
|Adjusted earnings per share 1 (Euro)||1.05||0.93||+ 13|
|Cash flow from operating activities||37||156||- 76|
|Cash flow from operating activities per share (Euro)||0.56||2.37||- 76|
|Adjusted total assets (at 31 Dec 2017 / 30 Sep 2017)2||4,298||4,248||+ 1|
|Adjusted equity (at 31 Dec 2017 / 30 Sep 2017)2||1,566||1,490||+ 5|
|Adjusted equity ratio (at 31 Dec 2017 / 30 Sep 2017)2||36.4%||35.1%||+ 4|
|Net financial debt (at 31 Dec 2017 / 30 Sep 2017)||1,099||1,077||+ 2|
|Total Investments||104||58||+ 79|
|of which growth investments||53||14||>+ 100|
|of which investments in existing business||51||44||+ 16|
|Number of employees (at 31 Dec 2017 / 31 Dec 2016)||6,086||6,148||- 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|