DGAP-Adhoc

VERBUND AG: VERBUND results for quarters 1-2/2015: efficiency increases, success in the electricity business and non-recurring effects result in positive income development despite a challenging environment

VERBUND AG / Key word(s): Half Year Results/Interim Report

29.07.2015 07:58

Dissemination of an Ad hoc announcement, transmitted by DGAP - a service of
EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Challenging conditions in the European electricity market changed little
during quarters 1-2/2015. Energy companies' earnings came under increased
pressure due to low prices for primary energy sources and CO2 emission
rights, which has led to low wholesale prices and margins. At the same
time, electricity generation capacities continue to rise in Europe, caused
above all by heavy subsidisation of solar and wind power.

In this challenging operating environment, VERBUND continued to steadily
work towards its goal of becoming a CO2-free, cost-effective and innovative
electricity provider, a path embarked upon in 2014.

Despite the further decline in average contract prices achieved, the
operating business performed positively in quarters 1-2/2015, reflecting
the successful implementation of VERBUND's strategy. Business performance
was positively impacted by the Group's measures to increase efficiency,
which significantly reduced personnel expenses and other operating
expenses, as well as continued implementation of thermal restructuring. One
example of this is the VERBUND Dürnrohr coal power plant block, which
discontinued operations on 30 April 2015.
Additional income from the increasingly volatile electricity market
resulting from higher earnings generated from the marketing of control and
balancing energy as well as from congestion management also increased
earnings. The positive performance was also underpinned by non-recurring
effects on profit, such as the reversal of provisions due to expected legal
settlements in the Grid segment. Finally, the above-average water supply
also had a positive effect. The hydro coefficient rose to 1.03, up 3.0%
over the long-term average and ten percentage points above the previous
year's figure. Generation from hydropower therefore rose by 1,039 GWh.
VERBUND's total own generation reached 17,217 GWh in the first half, an
increase of 10.5% compared with the first half of the previous year.

As a result of the aforementioned effects, EBITDA rose by 37.9% to
EUR489.1m. After adjustment for non-recurring effects, the increase in
EBITDA was 5.0% to EUR442.1m. The Group result rose by 246.6% to EUR196.3m.
Adjusted for non-recurring effects, the Group result increased by 72.3% to
EUR161.2m, which was still above the prior-year comparison period. The
positive trend in the Group result reflects, among other things, the clear