EWE Publishes Interim Report for the First Half of 2007
Mild Winter Squeezes Sales and Results
Oldenburg, Germany, August 29, 2007. The extremely mild temperatures throughout the winter and spring seasons resulted in a squeeze on sales and profit during the first half of 2007 for EWE, the Oldenburg-based energy group. “This led to a significant drop in sales in the gas business, amounting to over 20 percent compared to the first half of 2006. Another factor to take into account is that the winter of 2006 was significantly colder,” states Dr. Werner Brinker, CEO of EWE AG, on the occasion of the publication of the half-year report. However, the electricity business, which is less dependent on the weather, developed very well. The activi-ties in the telecommunications and information technology divisions have been influenced by strong demand and successful new customer business.
Sales Declined by 15 Percent in the First Half
Group sales for the first half of the year amounting to 4.3 billion euros lagged behind the previous year’s figures by 0.8 billion euros or 15 per-cent. The reason for this decline included the significant setbacks in natu-ral gas sales and in the area of gas transmission as well as delivery to end customers. Due to the revised inclusion of the gas transmission company VNG - Verbundnetz Gas AG, which has been accounted for as an affili-ated company under the equity method in the consolidated financial statements since May 15, 2007, a comparison with the first half of 2006 is only meaningful to a limited extent. The negative sales figure could be cushioned partially by the positive development of the electricity busi-ness. Sales in this segment increased in both volume and price. The elec-tricity business also accounted for a much greater percentage of sales than in the previous year. Sales increases in landlines, DSL and cellular phone networks also resulted in a broadening of sales in the ICT segment (In-formation Technology and Telecommunications). The number of custom-ers increased by about 5 percent to over 520,000
Decline in Sales and Operating Results Anticipated for 2007
Earnings before interest and taxes (EBIT) declined by 36 percent to 319 million euros. In addition to the weak earning power of the natural gas business in the first half of 2007, the lingering price pressures in the tele-communications market and the formation of a reserve for long-term fi-nancial commitments for expanding the EWE research center for energy technology at the University of Oldenburg also weighed on operating re-sults. The consolidated surplus decreased by 46 percent to 159.2 million euros. Since the first half of the year has a stronger impact on sales and operating results, EWE is anticipating a decline in business figures for 2007.
Number of Employees in the ICT Segment Increased by 6 Percent
As of June 30, 2007, the total number of employees in the EWE Group was 4,762. The decline in number of personnel compared to the end of 2006 (5,836) is a result of the revised inclusion of VNG. From an operat-ing standpoint, the number of employees increased. The ICT segment made the greatest contribution in this area. The telecommunications com-panies recorded a significant increase of 6 percent.
One of the major events in the first half of 2007 was the acquisition of 39.9 percent of the shares in natural gas provider Bursagaz in April 2007 and the associated launch of EWE in the Turkish energy market.
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