EQS-News: VERBUND AG: Results for quarters 1–3/2024: Decline in earnings despite good water supply and higher wind and PV output

The unmistakeable impact of climate change could be felt yet again in quarter 3/2024, which was marked by extreme weather conditions. Parts of Austria saw localised flooding in September. At the same time, we experienced a hot, dry summer intensified by the exceptionally warm Adriatic Sea, prompting severe storms and extreme weather phenomena. In light of this, it is abundantly clear that climate change is well underway and affects us all.

In order to address climate change, we are pursuing VERBUND’s 2030 strategy. With this strategy, we are not only sending a clear signal for climate change mitigation, but also making a major contribution to security of supply in Austria. We are investing in the further expansion of Austrian hydropower generation, above all in flexible storage power plants, to be able to compensate for the increased volatility in the electricity markets. We are also investing in the expansion of the Austrian high-voltage grid so as to be able to integrate increasing renewable electricity generation into the European electricity system, and we are investing in the expansion of electricity generation from wind and photovoltaic in our defined European target markets in order to achieve greater diversification in renewable electricity generation and be able to supply our customers exclusively with renewable electricity. Investments in large-scale battery storage concepts to stabilise the electricity supply, and our hydrogen initiatives, will play a key part in decarbonising the energy system.

Though VERBUND’s results declined in quarters 1–3/2024 due to the normalisation of conditions in the energy market following the gas price shock that occurred immediately after the outbreak of the Russia-Ukraine conflict, they are at a historical high level. EBITDA fell by 26.0% year-on-year to €2,625.2m. The Group result was down 30.0% to €1,387.2m and the Group result after adjustment for non-recurring effects was down 25.7% year-on-year at €1,485.7m. The water supply, which was well above average, bolstered earnings. At 1.07, the hydro coefficient for the run-of-river power plants was 14 percentage points above the prior-year figure and 7 percentage points higher than the long-term average. Earnings were hard-hit by the sharp drop in futures prices for wholesale electricity that were relevant for the reporting period. Spot market prices likewise fell in quarters 1–3/2024. The average sales price achieved by VERBUND for own generation from hydropower fell by €62.2/MWh to €113.8/MWh. Despite higher generation from photovoltaic installations and wind power plants, particularly those that came on stream in Spain and the wind power plants acquired in Austria and Germany, the earnings contribution from the New renewables segment also declined due to lower sales prices. A significantly improved (though still negative) earnings contribution in the Sales segment had a positive effect, partly due to lower procurement costs, while the contribution from the Grid segment suffered due to a drop in earnings at Gas Connect Austria GmbH and Austrian Power Grid AG.

Full-year 2024 guidance raised

Given the better-than-expected earnings performance, we have raised our full-year guidance for 2024. Based on expectations of average levels of own generation from hydropower, wind power and photovoltaic production in quarter 4/2024 as well as the opportunities and risks currently identified, VERBUND expects EBITDA of between around €3,200m and €3,400m and a Group result of between around €1,700m and €1,800m in financial year 2024. VERBUND’s planned payout ratio for financial year 2024 is between 45% and 55% of the Group result of between around €1,800m and €1,900m, after adjusting for non-recurring effects.

KPIs
	Unit	Q1–3/2023	Q1–3/2024	Change
Revenue	€m	9,789.9	5,837.6	–40.4%
EBITDA	€m	3,549.3	2,625.2	–26.0%
Operating result	€m	3,145.9	2,003.2	–36.3%
Group result	€m	1,980.6	1,387.2	–30.0%
Earnings per share	€	5.70	3.99	–30.0%
EBIT margin	%	32.1	34.3	–
EBITDA margin	%	36.3	45.0	–
Cash flow from operating activities	€m	4,153.4	2,332.8	–43.8%
Free cash flow before dividends	€m	3,018.7	1,541.5	–48.9%
Free cash flow after dividends	€m	1,475.0	–392.5	–
Performance of VERBUND shares	%	–2.0	–11.4	–
Gearing	%	23.3	22.2	–

 

Additional information and the interim financial report for quarters 1–3/2024 can be found 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:investor-relations@verbund.com