EQS-News: VERBUND AG: Results for quarters 1–2/2024: decline in earnings due to sharp drop in sales prices

After a record year in 2023, VERBUND entered financial year 2024 as a strong, resilient and well-positioned company. However, the energy market was volatile in quarters 1–2/2024. In particular, the key value driver for VERBUND – the wholesale price for electricity – is fluctuating considerably. Overall, wholesale prices remain higher than before the start of the Russia-Ukraine war, but well below the peaks of 2022 and 2023.

Our business activities in quarter 2/2024 centred on the systematic implementation of the 2030 sustainable growth strategy. Strengthening our integrated position in the domestic market with a focus on expanding domestic hydropower and the Austrian high-voltage grid, expanding new renewables energy generation in Europe and building a green hydrogen economy are top priorities. Our Mission V roadmap is helping us to meet the challenges ahead step by step. VERBUND is working across the board to transform the grid and make the transition to clean energy, and achieved numerous milestones again in quarter 2/2024.

Due to a weaker energy market environment, VERBUND posted lower results in quarters 1–2/2024 compared with the previous year. EBITDA fell by 21.9% year-on-year to €1,762.4m. The Group result was down 29.3% to €910.1m and the Group result after adjustment for non-recurring effects was down 22.9% year-on-year. 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 1–2/2024. The average sales price achieved for own generation from hydropower fell by €68.8/MWh to €113.3/MWh. The water supply, which was well above average, had a positive impact on earnings. At 1.12, the hydro coefficient for the run-of-river power plants was 17 percentage points above the prior-year figure and 12 percentage points higher than the long-term average. By contrast, generation from annual storage power plants fell by 3.1% in quarters 1–2/2024 compared with the prior-year reporting period. Generation from hydropower thus increased by 2,239 GWh to 17,292 GWh. Despite higher generation from photovoltaic installations and wind power plants, particularly those that came online in Spain, the earnings contribution from the New renewables segment declined due to lower sales prices. A significantly higher 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. Earnings were also reduced by a lower contribution from flexibility products.

Earnings forecast for 2024 adjusted

Based on expectations of average levels of own generation from hydropower, wind power and photovoltaic production in quarters 3–4/2024 as well as the current opportunities and risks identified, VERBUND expects EBITDA of between around €3,000m and €3,300m and a Group result of between around €1,500m and €1,650m 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 €1,600m and €1,750m, after adjusting for non-recurring effects.

 

KPIs
	Unit	Q1–2/2023	Q1–2/2024	Change
Revenue	€m	6,686.5	3,892.6	–41.8%
EBITDA	€m	2,255.2	1,762.4	–21.9%
Operating result	€m	1,988.0	1,282.3	–35.5%
Group result	€m	1,287.2	910.1	–29.3%
Earnings per share	€	3.71	2.62	–29.3%
EBIT margin	%	29.7	32.9	–
EBITDA margin	%	33.7	45.3	–
Cash flow from operating activities	€m	2,895.7	1,850.2	–36.1%
Free cash flow before dividends	€m	2,470.9	1,331.6	–46.1%
Free cash flow after dividends	€m	927.1	–602.4	–
Performance of VERBUND shares	%	–6.6	–12.4	–
Gearing	%	31.3	24.4	–

 

Additional information and the interim financial report for quarters 1–2/2024 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