Ad-hoc | 13 December 1999 08:09

Ad hoc-Service: EVN AG EVN 1998/99 Annual Res

Ad-hoc Mitteilung übermittelt durch die DGAP. Für den Inhalt der Mitteilung ist allein der Emittent verantwortlich. —————————————————————————— 1998/99 Annual Results At a glance Increased sales and revenues Operating result before extraordinary measures up on the previous year Cash flow from operating activities (ATS 4 bn) at all-time high Market deregulation: Ease of the burden on future business periods through extraordinary accounting measures Maintained dividend Extensive co-operation with Wiener Stadtwerke Business Development during the 1998/99 financial year (1 October 1998 – 30 September 1999) During the 98/99 financial year, the development of energy revenues was especially influenced by the lower temperatures compared to the preceding business period and the resulting increase in sales, particularly to household customers. Conversely, the adjustments to prices resulting from the initial phase of electricity market deregulation, and the fall in average natural gas prices had negative consequences for the revenue situation. In total, energy revenues rose by 2.0 % to ATS 11,554 million compared with the corresponding period of the previous year (twelve months from October 1, 1997 to September 30, 1998). Expenditure on electricity and primary energy purchases in 1998/99 remained at the level of the preceding year, despite the shorter period under review (12 months in 1998/99 as compared to the 13-months business period in 1997/98). On the one hand, EVN experienced lower gas purchasing prices, a favourable electricity sourcing situation as a consequence of imports, and a reduction in electricity generation prices due to the increased availability of lower cost hydroelectric power in Austria. However, these positive effects were entirely offset by the necessity for provisions to cover long-term purchasing obligations deriving from electricity market deregulation. During the period under review, personnel expenses were reduced by ATS 166 million, or 5.8%, over the preceding year, although wages and salaries rose by an average of 2.6% following an increase in the collective wage agreement on November 1, 1998. Despite expansion in the scope of consolidation, the average number of Group employees fell by 140, or 5.8 %, to 2,276. As of the balance sheet date, EVN AG had a work force of 2,188 (previous year 2,316) and the Group 2,229 (previous year: 2,343). The operating result before extraordinary measures of ATS 1,563 million, which was ATS 87 million or 5.9 % above the figure for the preceding year, represents a clear indication of the generally positive course of the 1998/99 financial year. Extraordinary depreciation and provisions resulting from electricity market deregulation The scope and speed of the effects of electricity market deregulation in February 1999 on electricity sales prices, which was already reflected by EVN’s quarterly results, were far greater than originally anticipated, especially in the fourth quarter of the financial year. As a result of the efforts of both national and international competitors to obtain trophy customers in Austria, electricity prices for industrial customers were pushed down to a level which is within the marginal costs of thermal generation and partially even below. In view of the coming general increase in the pressure on electricity prices, which will extend to the domestic customer area, and be exacerbated still further by the debate concerning a potential opening of the entire market, a medium- to long-term intensification of competition and a continuation of current low price levels can be assumed. This situation demanded a fundamental revaluation of EVN’s power stations and electricity procurement rights. A requirement for revaluation of ATS 5,570 million resulted, which corresponds with virtually complete depreciation of the remaining book values of these assets. These non-cash effective balance sheet measures can be regarded as one-off in nature and will ease the burden on results in coming financial years and strengthen EVN’s competitive position. These extraordinary measures led to an operating result of -ATS 4,007 million. The financial result was influenced by the increases in exchange rates for the Japanese yen and the Swiss franc on the balance sheet date and the related currency losses, as well as the omission of a write-up made last year and the lack of dividends from Verbundgesellschaft. In combination with the change in the financing structure of the Group and the resulting negative interest balance, these developments caused a fall in the financial result of ATS 274 million as compared with the 1997/98 financial year. In total, the developments described led to a result before tax of -ATS 4,143 million. Due to the capitalisation of tax deferrals and after accounting for minority interests, the net result amounts to -ATS 2,573 million, which is ATS 3,697 million down on the comparative figure for the preceding year. Based on the solid operating result, the payment of an unchanged dividend of ATS 30 per share is proposed. Outlook EVN sees its position in the changed competitive environment as being that of an efficient, regionally situated multi-service utility creating value through the expansion of its integrated core business into energy-related services field. In order to achieve this growth and a simultaneous improvement in cost efficiency, EVN is seeking to enter into alliances with suitable partners, primarily in Austria, but also on an international basis. The aim of such alliances is an improved competitive position through cost sharing, through the utilisation of economies of scale, as well as the creation of additional earnings potential in any area of the energy value added chain. With this target in view, the successful co-operation with Wiener Stadtwerke Holding AG (WStW) initiated in the form of e&s Energievertriebs und -service Gesellschaft m.b.H., is being further intensified by the creation of a joint energy trading company and a customer-related IT services enterprise. e&s was founded in 1998 as an energy sales and services company for obtaining and servicing additional customers both in- and outside the supply areas of EVN and WStW. Today, e&s has domestic and international customers with an annual sales volume of some 3.500 GWh. EVNs CEO Rudolf Gruber, Nine months after the formal opening of the European electricity market, EVNs alliance with Wiener Stadtwerke, the Viennese Municipal Utility, has already proved to be a successful approach. This strategy of forming alliances, as well as the extraordinary measures taken in the 1998/99 financial year, will strengthen the companys competitive position for the future. Ende der Mitteilung