BKW Energie AG

Half-Year Results 2010 : Sound operating earning power in difficult circumstances

    Bern (ots) - Despite a difficult economic and regulatory environment, the BKW Group maintained its market position, and achieved a gratifyingly sound result for the first six months of 2010. The result reflects the operating strength, low energy prices on the international markets, the falling stock markets and the low value of the Euro. Compared with the same period of the previous year, the consolidated operating revenue fell by 12.9 % to CHF 1,585.1 million. The operating earning power, earnings before interest, taxes, depreciation, and amortization (EBITDA), however, increased to CHF 261.9 million. Compared with the same period of the previous year, this comes to an increase of CHF 3.8 million or 1.5 %. Net profit for the first six months of 2010 amounted to CHF 134.4 million, which is CHF 21.1 million less than the result for the first six months of 2009. High volatility affected the electricity market in the first six months of 2010. The positive economic figures were spoilt by the uncertainties of the European debt crisis. The tentative economic recovery has only brought about a moderate increase in demand for electricity and a partial increase in primary energy prices. Electricity prices remained stubbornly low. The falling trend of the previous year continued into the first quarter of 2010. It was not until the second quarter that an upward correction started to take place. Strong sales business The BKW Group achieved sales in the first six months of 2010 of 13,083 GWh. This represents a slight dip of 0.9 % compared with the first six months of 2009 (13,203 GWh). Electricity sales in Switzerland increased compared with the same period for the previous year by 2.9 % to 4,213 GWh (4,095 GWh). This can be put down to an increase in demand in the supply zone that is related to economic conditions. The volume of electricity traded however fell by 13.3 % to 5,281 GWh (6,091 GWh). Electricity generation fell compared with the same period of the previous year by 367 GWh to 5,035 GWh. This fall can be attributed in particular to lower production from hydroelectric power plants and from the gas-fired combined cycle power plant in Livorno Ferraris in Piedmont. Hydroelectricity production fell by 211 GWh to 1,729 GWh due to the below-average amount of snowfall at the end of the winter and the lack of rainfall in April and May. Due to these hydrological conditions, the level of the reservoirs was slightly below the standard year-on-year level. Electricity generation from nuclear power stations reached 3,165 GWh, almost the level of the same period of the previous year (3,187 GWh). The production of the Mühleberg nuclear power station came to 1,617 GWh (1,624 GWh), and that of the gas-fired combined cycle power plant in Livorno Ferraris fell from 258 GWh to 123 GWh in line with market conditions. Variations from one business division to another In the first half of 2010, the BKW Group recorded consolidated operating revenue of CHF 1,585.1 million, which represents a fall of 12.9 % compared with the same period of the previous year (1,820.5 million). Each of the business divisions performed differently. Compared with the same period of the previous year, Energy Switzerland increased its turnover by 2.3 % to CHF 1,074 million (1,049.8 million). Energy International and Trading however recorded a fall in turnover of 18.3 % to CHF 1,306.8 million (1,599.7 million). Trading turnover fell by 30.6 % to CHF 530.4 million (763.9 million), and International Sales dropped by 2.9 % to CHF 268.2 million (276.1 million). International Sales however showed good results in terms of quantity. In Germany in particular, electricity sales increased for existing customers. The turnover and results for Energy International and Trading underwent a drop in wholesale trade prices in the second half of 2008 and in 2009. Flexible power plants were successfully optimised on the market in the first six months of 2010. Proprietary trading opportunities were lacking to a large extent. Revenue for the Networks segment increased by 2.0 % to CHF 322.3 million (316.1 million). Energy procurement costs came to CHF 953.1 million (1,167.2 million), which comes to a fall of 18.3 % compared with the costs for the same period of the previous year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 1.5 % to CHF 261.9 million (258.1 million). This increase is mainly due to the improved performance of the Swiss energy business and to the liquidation of reserves for onerous agreements for energy procurement from partner power plants coming to a total of CHF 28.9 million. The more favourable energy procurement costs were however offset by lower revenue on the market. Depreciation increased compared with the previous year by CHF 4.5 million to CHF 68.8 million. Earnings before interest and taxes (EBIT) of CHF 193.1 million were maintained at almost the same level as the previous year, which came to CHF 193.8 million. The financial result fell in the first half of 2010 compared with the same period for the previous year by CHF 31.1 million to CHF -26.6 million (4.5 million) as a result of the deteriorating stock markets and the low value of the Euro. The main influencing factor was share proceeds on shares and securities related to the decommissioning/disposal funds measured at market prices. Instead of the gains made during the previous period, the result was adversely affected by losses despite state funds in the first half of 2010 because of the falling stock markets. Thanks to the increase in nominal values, the state funds can show a balanced result on the whole for the first six months of 2010.

    The net profit was not affected as much as it might have been by operating result because of the negative financial result.

    The BKW Group profit for the first six months of 2010 fell, compared with the first six months of 2009 by 13.6 % from CHF 155.5 million to CHF 134.4 million. Outlook For the current financial year, the BKW Group expects a fall in sales because of the market conditions. The difficult circumstances with continued low energy prices on the international markets, economic uncertainty, new regulations and expenditure for strategic projects - in particular to boost production - are to have a detrimental effect on the operating result during the second half of the year. Taking all these factors into consideration, it can hardly be expected the that earnings before interest, taxes, depreciation, and amortization (EBITDA) of 2009 can be achieved - as revised to take into account the one-off effect of charging against the assets from provision plans. The financial result is dependent on financial market movements; assuming that equity markets remains stable, BKW can expect net profits to be lower than the previous year.

    The half-year report for 2010 can be downloaded at www.bkw-fmb.ch/halfyearreport10 The expectations and the forecasts expressed in this text are based on assumptions and are subject to risks and uncertainties. The actual results may differ from the expectations and forecasts expressed in this text. This text exists in German, French, English and Italian. The German version is binding.

Contact: Antonio Sommavilla, tél. 031 330 51 07; e-mail antonio.sommavilla@bkw-fmb.ch



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