EWE stabilises operating business in 2015

Oldenburg, Germany, 15 March 2016. EWE stabilised its operating business in 2015 and has, in part due to effective efficiency measures, generated operating earnings before interest and taxes (OEBIT) consistent with that of the previous year. Provisional figures put this at €428.1 million (previous year: €427.5 million), which falls within the scope of the forecast prepared for the financial year. Sales fell slightly to €7.82 billion (€8.13 billion), mainly as a result of falling electricity sales and declining electricity exchange prices. The consolidated net income of €-9.4 million (€146.3 million) was mainly depressed by impairments in the field of conventional generation and provisions for restructuring.

“We have been able to generate a stable operating result, despite having to withstand a negative result of equity investments from VNG in the past financial year. This shows how our companies have fared well in what remains a difficult market environment,” explained Matthias Brückmann, Chief Executive Officer of EWE AG. The stabilisation was achieved in part by consistent efficiency measures as well as a mild weather effect, with natural gas sales and network transport volumes up year on year. Nonetheless, non-recurring items resulted in EWE closing out the 2015 financial year with a small loss. Among other things, EWE had to accept impairments on its conventional swb power plant fleet, on district heating concessions and, due to the weak industry environment, also on goodwill. Provisions were also recognised for the restructuring of the Group, part of which also involved downsizing the workforce. Higher income taxes were also incurred compared to the previous year.
 
The average number of employees in the Group fell year on year by 299 to 8,855 employees. The main reason for this drop was the sale of investments in the IT business area at the end of the 2014 financial year.

New business area structure
The 2015 financial year marks the first time that EWE is reporting using its new business area structure, for which the activities of the swb Group and EWE’s international activities are reported under independent business areas.

Renewables, Grids and Gas Storage business area
In the Renewables, Grids and Gas Storage business area, sales external to the Group rose 7.1 per cent to €1,951.8 million (1,823.2). The growth is mainly the result of increased forwarded quantities of energy from renewable sources. The first full operating year of the offshore wind farm RIFFGAT also had a positive effect on the figures. Operating EBIT rose year on year by 0.7 per cent to €314.4 million (312.1).

Sales, Services and Trading business area
Sales external to the Group in the Sales, Services and Trading business area fell 6.3 per cent to €4,053.4 million (4,326.3) as a result of declining electricity revenue. The operating EBIT in this business area rose sharply to €80.4 million from the highly depressed earnings in the previous year (€18.7 million).
International business area
EWE’s overseas business in Turkey and Poland in the 2015 financial year generated sales external to the Group of €759.4 million (€773.0 million), 1.8 per cent less than the previous year. The business area’s operating EBIT was significantly increased by 37.5 per cent to €25.3 million (€18.4 million), however. This net profit was primarily the result of cheaper gas procurement conditions.

swb business area
In the 2015 financial year, the swb Group had to withstand a drop in sales of 12.9 per cent to €1,052.1 million (€1,208.3 million), a drop that was largely due to reduced sales of electricity from conventional power plants. The operating EBIT on the other hand was increased to €90.3 million from a comparatively low previous year’s net income (€40.2 million).

Outlook for 2016
For the 2016 financial year, EWE expects the market situation to remain challenging, especially in the field of conventional generation, and also expects competition in the sale of energy and telecommunications to remain lively. Provided that negative weather effects and other unpredictable developments do not materialise, EWE expects an operating result that is at least at the level of 2015 for the current financial year.

Date
The press conference regarding the financial report will be held on Wednesday, 27 April 2016 in Oldenburg.