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21.03.2018 - EWE AG

2017 financial year: EWE reports good operating result

Operating EBIT better than expected at EUR 503.4 million / Consolidated net income for the period at a satisfactory EUR 256.1 million / Sales increase to EUR 8.25 billion

Oldenburg, Germany, 21 March 2018. Based on preliminary figures, EWE had a good commercial performance in the 2017 financial year. Although its operating earnings before interest and taxes (OEBIT) of EUR 503.4 million were down almost six per cent on the previous year’s value (EUR 534.6 million), which had included a significant one-off effect, the figure was better than originally forecast. In spring 2017, EWE had expected its OEBIT to be 10 to 20 per cent lower than in the previous year. Consolidated net income for the period was satisfactory at EUR 256.1 million. As expected, it was also down on the previous year’s value (EUR 332.9 million), which had included two one-off effects that substantially increased this figure. EWE’s sales in 2017 were up around nine per cent at EUR 8.25 billion (2016: EUR 7.57 billion).

Commenting on the development of the company’s OEBIT in the reporting year, Wolfgang Mücher, CFO of EWE AG says, “All business areas contributed to the positive development of earnings in our operating business. Our network and sales business in particular made a greater contribution to earnings than in the previous year. The net increase of 157,000 customers across the Group in the areas of electricity, natural gas and telecommunications provides a strong indication. And with earnings remaining stable in our Overseas and swb business areas compared with the previous year, we were able to largely compensate for the absence of a particularly significant one-off effect at swb.” swb restructured its company retirement benefits in 2016. As a result, the one-off income from the reversal of pension provisions (around EUR 90 million) increased the previous year’s OEBIT.

With regard to consolidated net income for the period, which, in addition to the operating business, covers non-operating effects as well as net interest income and taxes, Mücher says, “Earnings were satisfactory once again, enabling further risk provisioning. With regard to the result for the period, our ability to largely compensate not just for the absence of the swb non-recurring effect already mentioned, but also for the absence of the one-off effect from the sale of the VNG shares was due in part to the good results in our operating business. It was also due to positive non-operating effects in the reporting year – including lower impairments than in the previous year and impairment reversals conducted in the reporting year. In addition to this, there was a clear improvement in our net interest income.”

Although sales rose by around EUR 684 million to EUR 8.25 billion in the last financial year, the increase, which was primarily attributable to the trading business, occurred alongside a corresponding rise in the cost of materials and services. The materials usage ratio resulting from these two key indicators (sales and cost of materials and services) stood at 76.8 per cent and was therefore roughly at the previous year’s level (76.1 per cent).

The average number of employees in the Group rose year on year by 86 to 9,134. Expressed as full-time equivalents (FTEs), the number of employees was 8,651, compared with 8,607 in the previous year. This increase was attributable to all business areas, with the exception of the swb business area. There was a significant rise in the number of employees in the area of renewable energies, due in part to the acquisition of the TurboWind onshore project developer.

Outlook for 2018
Taking into consideration the specific developments expected within the industry, the political and regulatory environment and the continuing intense competition in the energy and telecommunications market, EWE expects its operating EBIT in the current financial year to be down 15 to 30 per cent on 2017, which will at most mean earnings at the level recorded in 2015.

Publication
The press conference on the 2017 financial statements will be held on Thursday, 26 April 2018, in Oldenburg. EWE will also publish its Annual Report 2017 on the same day.