EVN’s 2000 profit rises 18% on trading, investments

Bloomberg

Alison Flint

December 12, 2000

Vienna, Dec. 12 (Bloomberg) à‚– EVN AG, Austria’s second- biggest listed utility, said fiscal 2000 profit rose 18 percent as an increase in power trading and earnings from investments offset declining electricity prices.

The company’s profit from operations, or net income excluding one-time items, increased for the year ended Sept. 30 to 94.5 million euros ($83 million) from 80.2 million a year earlier. Sales rose 5 percent to 948.1 million euros.

EVN, which is vying for dominance in Austria’s power market with Verbund AG, is trying to compensate for price cuts by developing its power trading business and by increasing receipts from stakes in other companies such as UTA Telekom AG. Austria’s market is scheduled to be fully open by October 2001.

“Their earnings are looking better because of the increase in trading activities,” said Alfred Reisenberger, an analyst at CA IB Investmentbank AG. The company said its power trading business helped boost sales 5 percent in the first nine months. It didn’t provide full-year figures.

EVN shares closed little changed at 31.88 euros. They’ve dropped 36 percent this year, while the ATX Index has fallen almost 10 percent.

EVN said it will combine parts of its distribution business with those of partners Wiener Stadtwerke AG and ESG Linz as early as the first half of next year to cut costs.

Water Purchase

The alliance partners are waiting for the provincial council in the northern region of Oberoesterreich to decide whether it will sell a quarter of its utility, Energie AG Oberoesterreich.

“Our offer stands until the end of the year,” said EVN Chief Executive Rudofl Gruber at a press conference.

The utilities offered a combined 6 billion schillings ($380 million) in cash for the Energie AG stake, as well as a share in EVN’s Strom GmbH worth about 2 billion schillings, EVN has said.

EVN got permission to buy regional water company NOeSIWAG from the province of Niederoesterreich this morning, it said. The utility will pay for the drinking-water provider through swapping an unspecified number of shares in itself in those of NOeSIWAG and in cash, it said.

It will give details of the transaction before shareholders vote on it Jan. 12, EVN added. NOeSIWAG had sales of about 220 million schillings in 1999.

“EVN has always said that it wants to be a multi-utility,” CA IB Investment’s Reisenberger said. “It’s hard to say whether this is really good until we see the price.”

EVN has a 9 percent stake in UTA Telekom, a local phone- service company. UTA may sell shares in itself, Gruber said, though “that will depend on the market,” he added.

Gruber also said first-quarter earnings next year may be affected by “milder-than-average” weather, though he didn’t say if it would affect full-year profit.

The company posted a loss after extraordinary items of 187 million euros in 1999, after the government withdrew compensation for investments such as a power station and a transmission network to boost competition in the domestic electricity market.

EVN will pay an unchanged 0.73 euro dividend for 2000, the company said.

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