Improved sales and earnings
Largely driven by weather-related volume growth in the end customer business, sales (net of natural gas tax) rose year-on-year by 4% to Euro 356 million. MVV Energie AG, Mannheim, was one of the few providers in Germany not to adjust its gas rates for two years in spite of rising oil prices. The rapid rise in the oil price in the first half of 2008, which impacts on gas procurement prices at our companies following a contractual delay of three months, made price adjustments at the beginning of the new 2008/09 financial year unavoidable. Experience in other European countries shows that decoupling the gas price from the oil price would not lead to any notable benefits for customers. Given declining oil prices, MVV Energie AG has announced a reduction in gas prices by an average of 5% as of 1 January 2009.
Adjusted for the positive valuation item for recognising energy trading transactions under IAS 39 as of
30 September 2008 (Euro 8 million), segment operating earnings (EBIT) rose year-on-year by Euro 24 million to Euro 35 million. In the year under report, in which weather conditions corresponded to long-term averages, all companies in our Group active in the gas business made up once again for the reduced earnings in the previous year due to lower heating gas turnover on account of the unusually mild winter.
Alongside the impact on earnings of weather conditions compared with the weak previous year (base effect), segment earnings were also boosted by cost savings resulting from efficiency enhancement measures. Moreover, earnings also benefited from the fact that, unlike in the previous year, no charge was incurred for prorated personnel provisions at the Stadtwerke Kiel subgroup and at MVV Energie AG, as well as from income generated at the Kiel subgroup in the year under report on district heating gas supplied for heat generation.
The gas trading successfully launched on the EEX European Energy Exchange in July 2007 was expanded in the year under report. Amended grid access and utilisation regulations led to far-reaching changes in gas procurement and to an ever wider range of procurement options on the wholesale level.
The Stadtwerke Kiel AG subgroup is increasingly relying on gas storage facilities to optimise its gas procurement. Kielspeicher 103 Verwaltungs GmbH, a subsidiary founded as a storage operator, already has storage capacities of 60 million m3, with a further 70 million m3 currently under construction.
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