EQS-News: VERBUND AG: Results for quarters 1–2/2023: strong income trend in the first half of 2023

Towards the end of 2022, the situation in the energy markets began to ease slightly, continuing to do so in quarters 1–2/2023. In the first half of 2023, wholesale gas prices fell significantly compared with the previous year. This was due to high stocks at gas storage facilities coupled with weaker demand for gas. Accordingly, wholesale electricity prices also fell. However, the market environment remains highly volatile.

Within the three focus areas of Mission V, VERBUND’s long-term comprehensive transformation programme, VERBUND achieved further milestones in quarters 1–2/2023 in the Hydro, New renewables and Grid area. The hydropower plant projects under construction to boost our renewable electricity generation (Reißeck II plus, Limberg III and Gratkorn) are proceeding as planned. Positive progress was also made with respect to the expansion of new renewables. In June 2023, VERBUND completed its acquisition of Solarpower Holding GmbH, strengthening its positioning in the solar photovoltaic market for large customers in Austria and expanding its activities throughout the PV value chain. Implementation of the wind and photovoltaic projects in Spain and other international markets was largely on track. In June 2023, the 39 MW wind project Loma de los Pinos near Seville (Spain) came on stream. Robust, stable power grids are crucial to the success of the energy transition. In quarter 2/2023, Austrian Power Grid AG reached a major milestone in its efforts to enable the transition to clean energy and the decarbonisation of the economy, industry and society: the Upper Austrian state government, as the EIA authority conducting the proceedings, confirmed the environmental compatibility of the “Energy Security in Upper Austria (Central region)” project. In addition, construction projects such as the 380-kV Salzburg line, the 220-kV Reschen Pass line and various substation projects are proceeding on schedule.

VERBUND saw an improvement in the results posted for quarters 1–2/2023. EBITDA climbed by 63.6% year-on-year to €2,255.2m. The reported Group result rose by 57.5% to €1,287.2m and the Group result after adjustment for non-recurring effects (non-recurring effects in Q1–2/2023: €–20.2m; Q1–2/2022: €+82.6m) was up 78.0%. At 0.95, the hydro coefficient for the run-of-river power plants was 5 percentage points below the long-term average but 5 percentage points above the comparative prior-year figure. Generation from the annual storage power plants rose by 6.2% in quarters 1–2/2023 compared with the prior-year reporting period. Generation from hydropower plants thus increased by 947 GWh to 15,054 GWh. The sharp rise in wholesale electricity prices on the futures markets that were relevant for the reporting period gave earnings a considerable boost. Conversely, spot market prices fell in quarters 1–2/2023. The average sales prices obtained for VERBUND’s own generation from hydropower rose by €69.6/MWh to €182.1/MWh. Higher generation from photovoltaic installations and wind power plants, especially from the plants put into operation in Spain, also had a positive effect, as did the higher earnings contribution from Gas Connect Austria GmbH in the Grid segment. This stood in contrast to the reduction in earnings caused by a significant decrease in thermal generation and the negative earnings contribution from the Sales segment attributable to high procurement costs, among other factors. The taxation of the windfall revenues of inframarginal power generators in Austria from December 2022 onwards and corresponding windfall profits in Romania had a negative impact of around €172m on the Group’s result.

Earnings forecast for 2023 adjusted

Based on expectations of average levels of own generation from hydropower, wind power and photovoltaic production in quarters 3–4/2023 as well as the opportunities and risks identified, VERBUND expects EBITDA of between around €3,800m and €4,200m and a reported Group result of between around €2,050m and €2,300m in financial year 2023. VERBUND’s planned dividend payout ratio for 2023 is between 45% and 55% of the Group result of approximately €2,070m to €2,320m, after adjusting for non-recurring effects.

 

The earnings forecast and the information on the expected payout ratio are contingent on VERBUND not being impacted further by possible energy policy measures to skim off some of the profits at energy companies.

KPIs
	Unit	Q1–2/2022	Q1–2/2023	Change
Revenue	€m	4,731.8	6,686.5	41.3%
EBITDA	€m	1,378.9	2,255.2	63.6%
Operating result	€m	1,184.2	1,988.0	67.9%
Group result	€m	817.1	1,287.2	57.5%
Earnings per share	€	2.35	3.71	57.5%
EBIT margin	%	25.0	29.7	–
EBITDA margin	%	29.1	33.7	–
Cash flow from operating activities	€m	920.3	2,895.7	–
Free cash flow before dividends	€m	366.9	2,470.9	–
Free cash flow after dividends	€m	–111.0	927.1	–
Performance of VERBUND shares	%	–5.6	–6.6	–
Gearing	%	67.0	31.3	–

 

Additional information as well as the Interim Financial Report for quarters 1–2/2023 is available at www.verbund.com > Investor Relations > Latest financial results.

Contact:

Andreas Wollein
Head of Group Finance and Investor Relations
T.: +43 (0)5 03 13 - 52604
F.: +43 (0)5 03 13 - 52694
mailto:[email protected]