Via da Clalt 307
7742 Poschiavo, ch
+41 (81) 83971-11
Repower records operating result of CHF 81 million in a difficult environment
2012 Financial Results
Total operating revenue generated by the Repower Group in 2012 fell by 6 per cent year-on-year to CHF 2.372 billion. EBIT before exceptional items amounted to CHF 110 million (-15%). Adjusted for exceptional items, EBIT was CHF 81 million (- 38%). Operating cash flow ended the year at CHF 54 million, while Group profit amounted to CHF 31 million (-43%). With equity of CHF 983 million (+2%) and an equity ratio of 43 per cent, Repower remains very solidly financed.
The results contain various exceptional items, including impairments on small-scale power plants (CHF 10 million), and value adjustments on receivables, in particular relating to sales business in Italy (CHF 20 million). The financial result was weighed down by currency factors and negative effects from interest rate hedging totalling around CHF 9 million.
Trading opportunities exploited ― new products in sales
Electricity sales declined during the reporting year by 15 per cent to just under 16 terawatt hours. In distribution business, Repower sold 6.5 terawatt hours of electricity (+ 2%). Sales of gas to end customers rose by 12 per cent to just over 171 million cubic metres. Due to the difficult environment, the volume of electricity traded was well below the previous year (-25%) at 9 terawatt hours. Conversely, the volume of gas traded was 7 per cent higher. Overall, by exploiting the few opportunities available, Repower achieved respectable margins both in trading and asset optimisation.
On the sales side, Repower is profiling itself in all key markets as a provider of high service quality, products tailored to customers' needs and innovative services. Italy remains the most important sales market for Repower: despite the poor economic situation, this market once more made a favourable contribution to the results in 2012, supported by new electricity products which help customers to optimise their consumption habits. In Germany Repower signed multi-year contracts with a number of customers and made a promising entry to the gas business. Sales business also performed well in Romania, growing volume by 7 per cent. Repower also expects this market to be even more buoyant in 2013 due to new legislation. In 2012 Repower invited customers in Switzerland to state their preference for four new electricity products. As a result of this "electricity poll", Repower now delivers electricity from renewable sources to 80 per cent of its Swiss customers. The first successful operating year for Repartner Produktions AG underscores the progress being made with the cooperation strategy.
Progress in project development
In 2012 Repower made great strides in terms of project development. In Lucera (Italy) a 26-MW wind farm was connected to the grid on schedule. Following initial positive progress in the approval procedure, the decision on the combined cycle gas turbine power plant in Leverkusen (Germany) is getting closer. The Canton of Graubünden is expected to grant the concession for the pumped storage power plant in Lagobianco in the near future. The coal-fired power plant project in Saline Joniche (Italy) received assurance of environmental compatibility in 2012 from the Italian Council of Ministers, and an agreement was reached with partners for Repower to reduce its stake to 20 per cent no later than the date on which the construction permit is granted. Finally, in 2012 Repower presented a revised variant of the Chlus hydro power plant project (Switzerland).
Fundamental change in market conditions
"Europe's energy and electricity industries are experiencing a paradigm shift as market conditions undergo a fundamental change," comments Repower CEO Kurt Bobst on the current challenges facing the energy industry. Despite the difficult environment at present, Repower believes that there are opportunities to be seized and that the company is in a good position to exploit them. In terms of energy efficiency and the development of smart systems, Repower is pursuing own initiatives and is supported by highly promising partnerships. On the other hand, Repower profiles itself as an attractive partner for other companies with whom cooperative ventures can be developed to mutual advantage. In its four key markets, Repower exploits the available room for manoeuvre and concentrates on offerings with significant customer benefits.
Repower draws conclusions
Repower does not expect the difficult situation to change in the short to medium term, and has therefore taken steps to ensure its sustained success on the market even under changed conditions.
The three main strategic measures are:
- Increase of efficiency: a comprehensive efficiency programme is being implemented, accompanied by strict cost controls. This will reduce Repower's annual costs by CHF 10 million. The programme was communicated in January 2013 and will start to have an impact from mid-2013.
- Reduction in investments: Repower is reviewing its project portfolio and focusing its investment projects. The size of the planned proprietary shares in individual projects, as well as the timing of project development and implementation, are being re-assessed and adjusted if necessary. This will reduce targeted investments by around 35-40 per cent over the next 10 to 15 years.
- Innovation and energy efficiency: Repower is committed to delivering innovative solutions for integrated systems and enhancing energy efficiency. "We want to change from an electricity supplier to an energy manager for our customers," explains Kurt Bobst. The first steps have been taken by setting up an energy efficiency platform and collaborating with Swisscom on dynamic consumption control.
Pursuing the "2050 energy strategy" with market-oriented instruments
Repower views the parameters currently under discussion for the national 2050 energy strategy as highly ambitious, but supports the objectives formulated in the strategy with the following provisos:
- It must be based on market-oriented instruments.
- Further administrative obstacles must be avoided.
- New renewable energies must be supported by the quota model rather than the counterproductive feed-in tariff.
- Market and efficiency incentives should be used to reshape the energy supply landscape.
- If the objectives of the 2050 energy strategy are to be achieved, demand must be largely decoupled from economic and population growth. In other words, energy efficiency must be accorded a pivotal role. This calls for new technologies, smart systems and investments in grids.
- Investments in new generating and transmission facilities must not be rendered impossible because of excessively stringent requirements.
Electricity will grow in importance and, for example, in the mobility area and in industrial processes, take the place increasingly of other energy sources.
Far-sighted dividend policy
Repower's dividend policy caters to the interests of its shareholders and thus the future needs of the company. The Board of Directors will recommend to the Annual General Meeting a dividend of CHF 2.50 per share and participation certificate. This is consistent with its policy of financing with a solid equity base.
2013 will continue to be characterised by regulatory uncertainty, low energy prices and pressure on margins. Nor does Repower see any sign of a correction in the enormous distortions currently shaping the market. Moreover, there appears little likelihood of any strong economic recovery in Europe. Repower therefore expects operating result for 2013 to be on a par with the 2012 figure.
The full annual report is available for downloading at www.repower.com/investor/.
Repower will be presenting its 2012 year-end results on 3 April 2013 at a media conference in Chur and an analysts meeting in Zurich. Invitations have been sent out separately.
The 2013 interim financial results will be published on 27 August 2013.
The Annual General Meeting will be held in Poschiavo on 15 May 2013.
Die Nutzung von hier veröffentlichten Informationen zur Eigeninformation und redaktionellen Weiterverarbeitung ist in der Regel kostenfrei. Bitte klären Sie vor einer Weiterverwendung urheberrechtliche Fragen mit dem angegebenen Herausgeber. Bei Veröffentlichung senden Sie bitte ein Belegexemplar an firstname.lastname@example.org.