First year of partnership with swb a success
Sales forecast for the 2010 financial year confirmed
Oldenburg, Germany, 26 August 2010. It is now approximately ten months since EWE and swb began collaborating more closely. Announcing the publication of the EWE Group’s 6-month interim report, Dr. Werner Brinker, Chief Executive Officer of EWE AG, gave a positive account of developments to date. “swb and EWE are both well-established and experienced energy service providers in the Bremen/Oldenburg region. Together, we are now making even faster progress with key energy supply issues,” he said. He added that the two companies had set up competence centres which would provide services for the whole Group.
For instance, business with renewable energies will be pooled at swb in future along with conventional energy production. “Generating electricity in conventional power plants and from renewable energies are important lines of business within the larger Group and express our joint sustainability strategy which is based on both economic and ecological considerations,” Dr. Brinker continued. He added that the changes to the make-up of both companies’ Boards of Management underlined this. Since January 2010, Dr. Thomas Neuber has been responsible for renewable energies on the swb AG Board of Management alongside his role on the EWE AG Board. Dr. Willem Schoeber is CEO of swb AG and was recently also placed in charge of conventional power production and representing swb AG’s interests on the Board of EWE AG. According to Dr. Brinker, energy trading is another important part of the cooperation. He added that the companies were well on the way to realising synergies here in the future too. EWE acquired all but one of the shares in the Bremen-based swb AG last October.
Increasingly positive economic indicators in Germany, Poland and Turkey prompted an improvement in EWE’s industrial customer business in the first half of 2010. With total sales of 31.6 billion kilowatt hours (kWh), gas volumes sold in the reporting period were up by 22.4 per cent on last year’s figure. This was due to economic factors, the weather and the first full consolidation of the Turkish trading company EWE Dogalgaz’s gas operations. Compared with the same period last year, electricity sales were up 8.7 per cent at 6.8 billion kWh (both excluding swb). “This means the year got off to a very good start in terms of sales,” explains Dr. Brinker. “However, our gas earnings are under pressure as a result of the price cuts for standard-rate customers implemented in 2009 and the current cost of purchasing gas on wholesale markets.”
EWE reported sales of €3.6 billion in the first six months of the year. This represents an increase of 24 per cent on the same period of 2009. This rise is primarily due to swb being included as a fully consolidated subsidiary for the first time. All other operating business areas also contributed to this sales growth, however. The Energy business area benefited above all from consolidation and exchange rate factors relating to its Turkish business. Sales in Germany remained constant. However, higher electricity sales were offset by dwindling sales in the gas sector. Sales at the Network business area were boosted by the increased feed-in of renewable energy and higher network use charges brought about by regulatory changes. The ICT business area also experienced organic growth, with sales climbing around 4 per cent year on year.
The operating result (EBIT) fell by 12 per cent from €381 million to €336 million. The fall in natural gas revenue due to lower prices and the simultaneous increase in procurement costs depressed earnings considerably. In the telecommunications sector, expenses exceeded the revenue increase in a tough competitive environment. By contrast, efficient cost management delivered an improvement in earnings in the Network business area compared with the first half of last year.
At €195 million, the consolidated net profit was 21 per cent below last year's figure.
EWE has confirmed its sales forecast for the full year and still anticipates a clear improvement in sales vis-à-vis 2009. Following the German Federal Supreme Court ruling on 14 July 2010 regarding special-rate gas contracts, the company is adjusting its projected profit. There may be a reduction in earnings, depending on the outcome of the conciliation proceedings.
EWE key figures for first half of 2010
|
|
H1 2010 |
H1 2009 |
Change
|
|
Group |
|
|
|
|
Sales |
€3,627.4 million |
€2,923.3 million |
24% |
|
EBIT* |
€335.6 million |
€381.3 million |
-12% |
|
Consolidated net profit* |
€195.0 million |
€247.0 million |
-21% |
|
Capital expenditure |
€265.7 million |
€255.3 million |
4% |
|
Average number of employees |
8,363 |
5,801 |
44% |
|
Energy business area |
|
|
|
|
Natural gas sales |
31,595.3 million kWh |
25,820.7 million kWh |
22% |
|
Electricity sales |
6,838.4 million kWh |
6,291.7 million kWh |
9% |
|
Sales |
€2,328.9 million |
€2,278.6 million |
2% |
|
EBIT* |
€51.9 million |
€154.5 million |
-66% |
|
Network business area |
|
|
|
|
Sales |
€989.8 million |
€892.1 million |
11% |
|
EBIT |
€145.8 million |
€92.4 million |
58% |
|
swb business area |
|
|
|
|
Sales |
572.0 |
-- |
-- |
|
EBIT |
77.9 |
-- |
-- |
|
ICT business area |
|
|
|
|
Sales |
€306.4 million |
€295.2 million |
4% |
|
EBIT |
€2.6 million |
€3.1 million |
-17% |
*previous year's figures adjusted
Download the interim report 2010.
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