Decline in district heating and gas turnover by up to 22 percent - First-quarter sales rise by six percent to Euro 582 million, EBIT of Euro 69 million 10 percent down on previous year - Annual results for 2006/07 expected to fall slightly short of 2005/06 financial year

Germany's largest municipal utility group, the Mannheim-based energy distribution and service company MVV Energie, which is listed in the SDAX (ISIN: DE000A0H52F5, WKN: A0H52F), increased its sales in the first quarter of the current 2006/07 financial year (1 October - 31 December 2006) by 6 percent compared with the previous year to Euro 582 million (previous year: Euro 551 million). At the same time, its operating earnings (EBIT) of Euro 69 million were 10 percent down on the previous year (Euro 77 million). "The ongoing unusually mild winter has meant that we are missing up to 22 percent of our turnover in the district heating and gas segments, which are dependent on weather conditions," stressed Dr. Rudolf Schulten, CEO of MVV Energie, upon the presentation of the quarterly figures in Mannheim on Wednesday. "All other divisions continue to report very pleasing developments."

Given that the unusually mild weather conditions had also continued in the second quarter to date, MVV Energie expected to see a further downturn in volumes and earnings in its district heating and gas businesses. "We therefore no longer expect it to be possible to reach the sales and operating earnings targets published in November 2006 for the overall 2006/07 financial year," added Dr. Schulten. "On the basis of the information currently available, we expect our earnings at the end of 2006/07 financial year to fall slightly short of the results reported for the highly successful 2005/06 financial year". Dr. Schulten concluded by pointing out that "in view of the forthcoming capital increase, which is to be executed before the end of the first half of the calendar year, the company has to forgo the publication of amended sales and earnings targets."

Apart from the impact of the weather conditions, earnings were also negatively affected by one-off charges and in particular by restructuring expenses in the form of personnel provisions of Euro 8 million at Stadtwerke Kiel, which would result in considerable cost savings in the coming years at the largest shareholding in the MVV Energie Group. However, it would be possible to compensate for this with positive factors, especially in the high-growth environmental energy and value-added services segments, which continued to report a very pleasing performance. In this respect, Dr. Schulten highlighted the successful integration of the companies fully consolidated for the first time, MVV Energiedienstleistungen GmbH, Berlin (previously IVB in Berlin), Industrieparks Gersthofen near Augsburg and the consulting subsidiary DECON.

The district heating and gas segments had witnessed declines of 22 percent and 20 percent respectively in their turnover compared with the first quarter of the previous year. Sales in the district heating segment amounted to Euro 76 million and were thus 10 percent lower than in the previous year. The gas segment reported a 15 percent decline in sales to Euro 111 million. Operating earnings amounted to Euro 7 million in the case of gas (first quarter of previous year: Euro 18 million) and Euro 24 million for district heating, compared with Euro 26 million in the previous year. Part of the decline in earnings in both segments is attributable to the proportionate charge resulting from personnel provisions at Stadtwerke Kiel. These developments were countered by "the successful performance of our high-growth environmental energy and energy-related services divisions". Operating earnings in the environmental energy rose by 24 percent to Euro 21 million. In the value-added services segment, operating earnings increased from Euro 1 million to Euro 9 million.

The German municipal utility shareholdings generated sales including energy taxes of Euro 257 million prior to consolidation in the 1st quarter of 2006/07, compared with Euro 243 million in the previous year, and thus contributed to the positive development of sales. However, the companies with district heating and gas operations were naturally also affected by weather-related downturns.

Sales at Stadtwerke Kiel rose by 1 percent between October and December 2006 to reach Euro 102 million, while operating earnings (EBIT) decreased by Euro 7 million to Euro 6 million. Mainly as a result of improvements in its waste and value-added services businesses, Energieversorgung Offenbach succeeded in increasing its sales for the same period by 12 percent to Euro 96 million and its operating earnings (EBIT) by Euro 3 million to Euro 13 million. Sales at Stadtwerke Solingen rose by 3 percent to Euro 27 million, while operating earnings (EBIT) fell at the same time by Euro 1 million to Euro 3 million. At Stadtwerke Ingolstadt, sales grew by 11 percent to Euro 28 million as a result of increased sales in its electricity and value-added services businesses, while operating earnings (EBIT) declined by just under Euro 1 million to Euro 3 million. The weather-related decline in turnover at Köthen Energie led sales to fall by 6 percent to Euro 4 million and operating earnings (EBIT) to decrease from Euro 0.9 million to Euro 0.5 million.

The mild winter also lefts its mark on the foreign subgroups. The weather conditions were the principal cause for the decline in operating earnings (EBIT) by Euro 1 million to Euro 4 million in the Czech Republic and by Euro 0.3 million to Euro 1 million in Poland.

The CEO of MVV Energie, Dr. Rudolf Schulten, expressed his satisfaction with the performance of the business fields not affected by weather conditions. "We achieved substantial growth in these areas. Our balanced business portfolio and the expansion of business fields not dependent on weather conditions mean that we are better able to absorb the unforeseeable downturn resulting from the unusually mild weather conditions in this year's winter months than other companies in our sector."

Mannheim, 14 February 2007

Key Figures of the MVV Energie Group ¹
1 October 2006 - 31 December 2006

Euro million	2006/2007	2005/2006 adjusted 2	% change adjusted 2
Sales 3	582	551	+ 6
EBITDA	104	109	- 5
EBITA	69	77	- 10
EBIT	69	77	- 10
EBT	43	56	- 23
Net income for the period	26	29	- 10
Net income for the period after minority interests	21	26	- 19
Earnings 4 per share 5 (Euro)	0.38	0.48	- 21
Cash flow pursuant to DVFA/SG	63	61	+ 3
Cash flow per share 5 pursuant to DVFA/SG (Euro	1.14	1.15	- 1
Free cash flow 6	75	- 40	-
Total assets (as of 31.12.)	3 182	3 153	+ 1
Equity (as of 31.12.)	865	858	+ 1
Investments 7	54	49	+ 10
Number of employees 8	6 728	6 456	+ 4
1 in accordance with International Financial Reporting Standards (IFRS)
2 previous year's figures adjusted by initial statement of put option at Stadtwerke Kiel AG
3 excluding energy taxes
4 in accordance with IAS 33
5 increase in number of shares (weighted quarterly average) from 53.3 million to 55.8 million as    a result of capital increase
6 cash flow from operating activities less investments in intangible assets, property, plant    and equipment and investment property
7 investments in intangible assets, property, plant and equipment and investment property, as    well as payments for the acquisition of fully and proportionately consolidated companies and other    financial assets
8 including external personnel at Mannheim waste-to-energy plant of MVV Energie AG