Germany: EnBW Announces Annual Results for 2011

“2011 was a difficult year, but one that was decisive for EnBW in terms of the new energy concept. With the commissioning of Germany’s first commercial offshore wind farm, the official commissioning of the new hydro-electric power station in Rheinfelden, the completion of the highest wind turbine in the northern Black Forest with a hub height of 138 metres and the implementation of the “Sustainable town of Leutkirch” project, including the related commissioning of a solar farm, EnBW developed and implemented a whole host of ground-breaking projects. These are examples of how EnBW is actively shaping the new energy concept,” announced Hans-Peter Villis, CEO of EnBW Energie Baden-Württemberg AG, at this year’s company press briefing on annual results.

“We will continue along this path as before, consistently, yet on a sound financial footing. The road will not be easy – as the political decisions affecting the energy industry taken in the past year have reduced our group earnings considerably and will continue to do so,” added Villis.

Although EnBW was able to increase its unit sales of electricity by 6% on the prior year to 155.7 billion kilowatt-hours as well as significantly increase its external revenue by 7.3% to € 18,789.7 million, its result of operations before income taxes, financial result and investment result (adjusted EBIT) fell by some 17% in € 1,598.1 million in 2011 as a result of a material negative impact due to the new energy concept.

Adjusted EBIT in the electricity generation and trading segment fell by 20.9% to € 1,283.1 million in 2011. The negative effects on earnings arose primarily from the new nuclear fuel rod tax introduced in 2011 as well as the permanent shutdown of two of EnBW’s nuclear power plants as part of the new energy concept introduced in Germany. This also led to the need to procure budgeted quantities of electricity from these two power plants that had already been sold on the forward market. In addition, higher fuel costs and the smaller spreads between the price of off-peak and peak electricity in comparison to the prior year also caused a further loss in earnings.

Despite stable earnings in the sales business, adjusted EBIT in the electricity grid and sales segment fell by 24.5% on the prior year to € 199.2 million. This was due to higher expenses in the grid area, such as connection costs for the offshore wind farms, as well as higher maintenance costs primarily incurred in the fourth quarter of 2011. At € 51.3 million, adjusted EBIT in the gas segment fell by 36% in 2011 in comparison to the prior-year level, which was primarily attributable to the sale of GESO Beteiligungs- und Beratungs-AG in the prior year. Adjusted for consolidation effects, the operating result in this segment fell by 2.5% or € 1.3 million. The volume of gas transmissions was down on the prior year due to the weather. As a result, EnBW recorded a fall in revenue from network user charges and saw earnings decrease, accordingly.

Only a few weeks ago, EnBW put into operation the first wind turbine in the Freudenstadt district (Schopfloch) in the Northern Black Forest with a hub height of 138 metres. EnBW was also given permission for another project, the Berghülen wind farm in the Alb-Danube district. EnBW is also reviewing or in negotiations about some 100 locations for the construction of around 400 wind turbines. EnBW has already secured 22 of these 100 or so locations for the construction of wind turbines in Baden-Württemberg.

“EnBW is well positioned for the expansion of renewable energies and the new energy concept. We have a full pipeline of projects, and the expansion of renewable energies is making noticeable progress,” said Villis.

With regard to the financial burdens prevailing this year and with a view to the nationwide “Fokus” efficiency programme, the Board of Management will, in consultation with the Supervisory Board, propose to the 2011 annual general meeting that a dividend of € 0.85 per share be distributed. In the prior year, a dividend of € 1.53 per share was distributed. “With the dividend proposed for 2011, the shareholders are making a significant contribution towards maintaining EnBW’s credit rating and thereby strengthening the company’s ability to invest,” commented Villis.

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Offshore WIND  Staff, March 07, 2012; Image: enbw