EWE publishes Interim Report 2008
On course for growth despite difficult economic conditions
Oldenburg, 29 August 2008. The high price of energy and raw materials on the supply markets has hampered the business of Oldenburg-based energy group EWE. Group sales rose in the first half of 2008 to € 2.6bn, up by 11.1 per cent on the prior-year period. This growth is due to an upturn in both prices and volumes. Despite higher sales, earnings before interest and taxes (EBIT) were down 12.1 per cent from last year at € 229.8m. “Electricity and gas purchase costs have shot up in the last twelve months,” explained Dr. Werner Brinker, CEO of EWE AG, commenting on the publication of the interim report. “We were forced to pass these costs on to our customers. The delay between these two events had a negative impact on our result.” Group net profit for the period came to € 127.2m (previous year: € 145.1m). Dynamic development in the telecommunications and IT segments was the main reason for the workforce swelling to 5,117 in the first half of the year (previous year: 4,693).
Difficult market environment for business area Energy
At € 91.8m, the EBIT of business area Energy was 33.9 per cent lower than in the previous year. In a difficult market environment, the sharp rise in energy purchase costs and increasing competition were the main contributors to the result falling significantly. Improved sales figures in the electricity business reflect the higher wholesale prices. These led EWE to raise its electricity prices in April and November 2007. Volume losses across all customer segments had a contrary effect. The natural gas business posted improved sales on account of the weather. In the first half of the year gas sales rose by 6.8 per cent thanks to lower temperatures than in the previous year.
Network result remains under pressure from regulation
In the first six months of the year operating earnings (EBIT) for the business area Network fell by 13.7 per cent compared to the previous year to € 76.3m. This was mostly due to the Federal Network Agency reducing electricity network charges on 1 March 2008, which even our strict cost management was unable to fully compensate for.
Positive development for telecommunications and IT
ICT recorded an improved result and boosted sales figures in the first half of the year. Sales went up by 12.4 per cent to € 285.6m, while the EBIT was almost doubled, coming in at € 20.1m (previous year: € 10.2m). In the telecommunications segment, the number of customers increased by around 25 per cent on last year's figures. This was helped by the acquisition of the Brunswick telecommunications services provider BCC and the Hamburg cable network operator Martens, as well as the organic growth experienced by all of our telecommunications companies. The DSL business expanded with particular vigour, with the amount of broadband customers jumping by around 15 per cent to 500,000. Pricing pressure remains strong in the telecommunications market, which dampened development somewhat. The IT segment was able to assert itself in a difficult market environment.
Sales outlook for 2008 confirmed
In comparison to the previous year, EWE still expects its 2008 operating result to be lower and anticipates that the EBIT will drop by around 10 per cent. “The course of the first half of the year bore out the expectations that we had for the year as a whole in light of the difficult economic conditions in the energy markets,” said Brinker. “This spurs us on. We are optimistic about bringing the situation of our markets in line with the demands of our customers and offering effective solutions. In the last few months we have developed a bundle of new products which will help us tap into new sales areas. We were also able to expand our international business by acquiring a stake in Turkish natural gas provider Kayserigaz.”
The tables below provide figures for the EWE Group and its business segments. The full Interim Report 2008 is available to download from the internet: http://www.ewe.de/.
EWE figures, first half of 2008
|
|
H1 2008 |
H1 2007 |
Change % |
| EWE Group (in €m) | |||
| Sales |
2.599,7 |
2.229,0 |
11,1 |
| EBIT |
229,8 |
261,3 |
-12,1 |
| Net profit for the period |
127,2 |
145,1 |
-12,3 |
| Corporate Center (in €m) | |||
| Sales |
3,8 |
2,4 |
58,3 |
| EBIT |
189,3 |
265,2 |
-28,6 |
| Energy (in €m) | |||
| Umsatzerlöse |
1.934,2 |
1.770,9 |
9,2 |
| EBIT |
91,8 |
138,8 |
-33,9 |
| Network (in €m) | |||
| Sales |
830,0 |
776,3 |
6,9 |
| EBIT |
76,3 |
88,4 |
-13,7 |
| ICT (in €m) | |||
| Sales |
285,6 |
254,1 |
12,4 |
| EBIT |
20,1 |
10,2 |
97,1 |
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