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Electricity Turnover
of the MVV Energie Group1
kWh million 2003/2004   2002/2003   % change
Wholesale electricity trading
(including secondary distributors) 2		 5,587   2,678   +109
Industrial and large commercial customers 7,037   6,567   +7
Private and small business customers 1,777   1,592   +12
  14,401   10,837   +33
1 excluding electricity turnover from energy from waste plants and value-added services
2 reported on net basis and excluding supplies within the group
 

With a 50% share of sales and a 34% share of operating earnings (EBIT), the electricity segment is one of the most significant business segments in our group of companies.

The circumstances surrounding the sale and trading of electricity and portfolio management activities were far from optimal during the year under report. The successful conclusion of agreements in spite of the considerable rise in procurement prices and grid expenses represented a great challenge in all customer segments. All of the companies in our group were nevertheless able to maintain their positions in the market during the year under report.

Our sales in this highly competitive market rose by Euro 148 million (+22%) to Euro 828 million. Of this significant year-on-year increase, Euro 51 million resulted from the initial sales contribution of Stadtwerke Kiel for the five-month period of May to September 2004. In addition to this external growth, MVV Energie AG generated a higher level of sales in its wholesale electricity trading and national electricity businesses. Our shareholdings in Offenbach and Solingen also reported higher sales in their electricity businesses. Of the total electricity sales of Euro 900 million (prior to consolidation), 68% related to MVV Energie AG (including electricity trading) and 32% to the shareholdings in municipal utility companies in Offenbach, Solingen, Ingolstadt and Kiel, which together generated sales of Euro 291 million.

In order to improve the clarity of the presentation of our business performance and by analogy with the approach taken by other electricity providers, we have reported those sales resulting from our proprietary electricity trading business which are undertaken purely for trading purposes on a net basis for the first time, i.e. only in the amount of the gross margin thereby generated (sales price minus procurement price). This change in reporting procedures has no impact on earnings.

Our electricity turnover (excluding energy from waste plants and valueadded service projects) rose by 3.6 billion kWh (+33%) compared with the previous year to reach 14.4 billion kWh. Of this growth, 2.9 billion kWh related to wholesale electricity trading. Following the deduction of the turnover relating to proprietary trading and risk control, we turned over 5.6 billion kWh in this field during the year under report, compared with 2.7 billion kWh in the previous year. This increase mainly resulted from the initial consolidation of Stadtwerke Kiel.