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Impact of economic crisis, price cuts and mild weather conditions at year end leave their mark on 1st quarter of 2009/10 - Forecast for financial year as a whole confirmed
The Mannheim-based energy company MVV Energie (WKN: A0H52F, ISIN: DE000A0H52F5) has begun its new 2009/10 financial year with a slight dip in earnings due to the ongoing impact of the economic crisis, as well as several rounds of price cuts in the past year and milder weather conditions overall in October to December of last year. At his presentation of the financial report for the 1st quarter (1 October - 31 December 2009) in Mannheim on Monday, company CEO Dr. Georg Müller could nevertheless also point to slight sales growth. "The turnover growth we achieved in our nationwide sales with industrial and commercial customers thus more than off-set the loss of volumes due to economic and weather-related factors", commented Dr. Müller. "Given the fall in energy prices, the same was not possible for earnings". For the year as a whole, the company confirmed that it expected to be able to match the previous year's level of sales and earnings.
According to the CEO, the company managed to increase its sales to Euro 839 million in the past three months, up 1 percent from Euro 830 million in the equivalent period in the previous year. Given lower energy price levels, this had only been possible with strong volume growth. Electricity and gas turnover, for example, had risen by 8 percent and 7 percent respectively. Adjusted operating earnings before interest and taxes (adjusted EBIT), by contrast, decreased from Euro 92 million in the previous year's period to Euro 85 million in the 1st quarter of 2009/10.
The decline in operating earnings was attributable above all to the electricity and environmental energy segments. The economic crisis thus impacted on sales both in the electricity business due to a decline in generation prices and reduced production at some industrial cus-tomers and in the environmental energy segment due to falling commercial waste prices and lower electricity prices.
Annual target affirmed
Despite ongoing insecurity in the wake of the economic and financial crisis and the uncertainties surrounding further developments in commodity and energy prices, MVV Energie has affirmed its expectation that it will more or less match the previous year's level of sales of around Euro 3.2 billion and adjusted EBIT of Euro 239 million once again in the current 2009/10 financial year as a whole. According to the CEO, this still represented an ambitious target given the record sales posted for the past 2008/09 financial year, which had been significantly driven by prices. "In line with the overall development in energy prices, our com-panies introduced double-digit price cuts in the gas and district heating segments in the past year. These will now impact on sales for the first full year," explained Dr. Müller. Alongside further turnover growth, MVV Energie intends to offset these downturns by making consistent efforts to achieve further cost savings
In the medium to long term, the company will be building above all on climate protection. It has therefore directly aligned its strategy to the future markets of renewable energies, energy efficiency and cogeneration. In its expansion of renewable energies, MVV Energie will be focusing on wind energy and on using biomass. At the same time, the company intends to further expand and concentrate its environmentally-friendly supply of district heating at all locations.
"Given the further rise in cost and competitive pressure, the second phase of incentive regulation and political climate protection requirements, our sector has been undergoing fundamental change for years now and will continue to do so in the near future," added Dr. Müller. "This process has been intensified by the economic crisis."
Mannheim, 15 February 2010
Key figures of the MVV Energie Group
1 October 2009 to 31 December 2009
| Euro million |
2009/10 |
2008/09 |
+/-% change |
 |
| Sales excluding electricity and natural gas taxes |
839 |
830 |
+ 1 |
| Adjusted EBITDA 1 |
120 |
127 |
- 6 |
| Adjusted EBITA 1 |
85 |
92 |
- 8 |
| Adjusted EBIT 1 |
85 |
92 |
- 8 |
| Adjusted EBT 1 |
58 |
68 |
- 15 |
| Adjusted net surplus for period 1 |
39 |
46 |
- 15 |
| Adjusted net surplus for period after minority interests 1 |
37 |
37 |
- |
| Adjusted earnings per share 1,2 in Euro |
0.55 |
0.57 |
- 4 |
| Cash flow before working capital and taxes |
118 |
124 |
- 5 |
| Cash flow before working capital and taxes per share in Euro |
1.80 |
1.88 |
- 4 |
| Free cash flow |
1 |
- 121 |
+ 101 |
| Adjusted total assets as of 31.12.2009/30.9.2009 1 |
3 612 |
3 566 |
+ 1 |
| Adjusted equity as of 31.12.2009/30.9.2009 1 |
1 242 |
1 208 |
+ 3 |
| Adjusted equity ratio as of 31.12.2009/30.9.2009 |
34.4% |
33.9% |
+ 1 |
| Investments |
58 |
47 |
+ 23 |
| Number of employees as of 31.12.2009/31.12.2008 |
6 087 |
5 897 |
+ 3 |
|
| 1 excluding non-operative IAS 39 valuation items/fair values of financial derivatives |
| 2 calculated using exact figures |
Note: the complete financial report for the 1st quarter of the 2009/10 financial year can be found on the internet in the download section of this site. |
