BKW Energie AG

2012 Half-Year Results Positive developments despite difficult conditions

Bern (ots) - Despite a challenging economic and regulatory environment, the BKW Group recorded a better result for the first half of 2012 than in the prior-year period. Consolidated operating revenue rose from CHF 1,346.4 million in the prior-year period to CHF 1,368.1 million, corresponding to an increase of 1.6%. Operating profit before depreciation, amortisation and impairment (EBITDA) was CHF 34.4 million or 15.6% higher at CHF 255.2 million. The result is impacted by persistently low energy prices, higher production from renewable energies and the positive effects of the cost reduction and efficiency enhancement programme now in place. The financial result improved year-on-year due to a recovery on equity markets. Net profit for the first six months of 2012 amounted to CHF 112.3 million, corresponding to an increase of 24.1% or CHF 21.8 million versus the first half of 2011.

In the first half of 2012 the volume of electricity sold by the BKW Group was 9,748 GWh, corresponding to a decrease of 9% versus the first half of 2011 (10,716 GWh). Electricity sales in Switzerland fell by 7% year-on-year to 3,847 GWh, primarily due to reduced business with sales partners outside BKW's supply region. In terms of international sales, the volume of electricity sold in Italy rose by 8% to 868 GWh. The 64 GWh increase is attributable in particular to new customer acquisition.

Higher production from renewable energies The total volume of electricity generated by BKW fell by 96 GWh year-on-year to 5,465 GWh. This reduction was a result of the market-related 505 GWh decline in volume generated by the Livorno Ferraris gas-fired combined-cycle power plant in Italy. Hydroelectricity production increased by 258 GWh to 1,793 GWh in the first half of 2012, due to higher precipitation. The first six months of 2012 saw a significant rise in the volume of electricity generated from renewable energies. In Switzerland this increase amounted to 13 GWh due to higher production volumes from Mont-Crosin wind farm. In neighbouring countries an increase of 142 GWh to 260 GWh was achieved, thanks to continued expansion of production capacity, good wind conditions and the very good technical availability of plants. At 3,217 GWh, the volume of electricity generated by nuclear power plants was only slightly below the prior-year level of 3,221 GWh. In the first half of 2012 Mühleberg nuclear power plant generated 1,630 GWh of electricity, corresponding to an increase of 9 GWh compared to the prior-year period.   Solid core business In the first half of 2012, consolidated operating revenue generated by the BKW Group increased by 1.6% year-on-year to CHF 1,368.1 million. The Energy Switzerland segment posted a volume-related reduction in net sales to external customers, which dropped by 7.1% to CHF 552.9 million. However, the segment-related operating profit (EBIT) was significantly higher, rising by 54.0% to CHF 102.1 million. While the Energy International and Trading segment continued to face a difficult market environment in the first half of 2012, net sales to external customers rose by 7.5% to CHF 657 million, chiefly due to the international sales business. EBIT declined from CHF 41 million to CHF -14.8 million. This reduction is primarily a result of the further weakening of the euro and lower market prices. The Networks segment improved net sales to external customers by 23.8% to CHF 98.7 million, with the infrastructure business performing particularly well. Despite ElCom's reduction of chargeable costs for the distribution grid, EBIT rose by CHF 7.3 million to CHF 63.1 million, mainly on account of higher transit volumes and the effect of cost reduction measures.

Higher operating profit, good financial result Personnel and material expenses were the first to be impacted by the Group-wide cost reduction and efficiency enhancement programme. The BKW Group improved EBITDA by 15.6% to CHF 255.2 million. Depreciation expenses were CHF 20.1 million higher year-on-year at CHF 99.3 million. This increase is attributable to the power generating facilities acquired in the second half of 2011 and to the revised cost estimate for nuclear waste disposal recognised at the end of 2011. EBIT was 10% higher at CHF 155.9 million. In the first half of 2012 the financial result improved year-on-year by CHF 27.4 million to CHF -21.6 million. This increase is due to the more favourable trend on equity markets, which had a positive impact on the return on shares in the decommissioning and disposal funds, which are measured at fair value. Contrary to the losses recorded in the prior-year period, the state funds posted a gain for the first half of 2012. BKW's net profit rose from CHF 90.5 million to CHF 112.3 million, corresponding to an increase of 24.1%.

Outlook BKW expects the market environment to remain challenging in the second half of 2012, with energy prices remaining low and strong margin pressure on international markets. Regulatory requirements and a persistently strong Swiss franc will weigh down the full-year operating results for 2012. However, the cost reduction and efficiency enhancement programme will have a positive effect, although the full impact will not yet be felt. Taking all these factors into account and given the ongoing uncertainties, also on financial markets, EBITDA and net profit for the current financial year may deviate significantly from the adjusted figures for 2011.

  Into the future, with the BKW 2030 strategy

The company's performance was impacted by the economic environment, the events in Fukushima, and Switzerland's new energy policy situation. At the political level, work was started on the 2050 strategy which will necessitate a radical restructuring of the existing energy supply system. With its new BKW 2030 Group strategy, the BKW Group is already preparing for the transition and the period following the shutdown of Mühleberg nuclear power plant (KKM). At the core of the strategy is BKW's continued commitment to delivering a reliable, cost-effective and ecological power supply and to consolidating and expanding its position as Switzerland's largest vertically integrated energy supplier. The focus is on expanding production from renewable energies (hydro and wind power) wherever profitability is assured, and further pursuing the cost reduction and productivity enhancement programme, for which all related measures will be fully implemented by 2015. Backed by its expertise right along the electricity supply value chain, BKW intends to develop new business fields and service offerings - for example for municipalities - with a view to increasing its earning power. Energy and cost efficiency will continue to be key aspects of the BKW strategy.

The 2012 Half-Year Report can be downloaded from http://www.bkw-fmb.ch/halfyearreport12

***************** The statements contained in this press release constitute expectations and forward-looking statements. Because these statements are subject to risks and uncertainties, actual future results may differ materially from those expressed or implied by the expectations and statements. This media release is issued in German, French, English and Italian. The German version is authoritative.


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