VERBUND AG: 2020 annual results: encouraging business performance despite COVID-19 crisis
DGAP-News: VERBUND AG
/ Key word(s): Annual Results
Financial year 2020 was very encouraging in spite of the COVID-19 crisis. The excellent results and the solid performance of VERBUND shares demonstrate that our sustainable business model works well even in times of crisis and that the Group has considerable strategic flexibility and resilience to external influences. As a supplier of electricity generated almost exclusively from renewable sources of energy, we are ideally positioned to navigate a decarbonised, decentralised and digitalised energy future.
In 2020, the COVID-19 crisis led to a rapid deterioration of the overall energy market in which VERBUND operates. Following the onset of the crisis in Europe, wholesale electricity prices fell due to lower electricity demand, an excess supply of CO2 emission rights and a drop in prices for coal, gas and oil. In the wake of this downturn in the first half of 2020, the energy market environment started to improve again from mid-2020. Wholesale prices for electricity recovered, and prices for coal, gas and CO2 emission rights began to stabilise again mid-year.
The good positioning in connection with the improvement in the energy market environment was also rewarded accordingly in the capital markets. VERBUND shares finished the year trading 56.1% higher and thus significantly outperformed the ATX and the STOXX Europe 600 Utilities. Its market capitalisation of €24.3bn as at 31 December 2020 made VERBUND the highest-valued company on the Vienna Stock Exchange. Rating agencies S&P and Moody’s confirmed VERBUND AG’s good rating with “A/stable outlook” and “A3/stable outlook”, respectively. VERBUND therefore ranks among one of Europe’s premium utilities.
The results posted by VERBUND for financial year 2020 improved in spite of negative impacts caused by COVID-19. EBITDA increased by 9.2% to €1,292.8m. The Group result rose by 13.8% to €631.4m compared with the previous year. At 1.01, the hydro coefficient for the run-of-river power plants was on a level with the previous year and 1 percentage point above the long-term average. Generation from our annual storage power plants increased by as much as 14.8% in quarters 1-4/2020. Generation from hydropower therefore increased by 864 GWh compared with the previous reporting period. The rise in wholesale electricity prices on the futures markets during the relevant hedging period also had a positive effect on earnings. By contrast, prices on the spot markets declined significantly in 2020, due in particular to the effects of the COVID-19 crisis. As a consequence of these developments, the average sales prices obtained for VERBUND’s own generation from hydropower increased by €5.6/MWh to €44.6/MWh. The EBITDA contribution from the Hydro segment thus rose significantly. The EBITDA contribution from the Sales segment also increased, while the contributions from the New renewables, Grid and All other segments decreased. The development of the financial result was very encouraging, due among other things to a significant reduction in interest expenses attributable to high principal repayments in financial years 2019 and 2020. The Group result for financial years 2019 and 2020 was also influenced by non-recurring effects. Adjusted for these non-recurring effects, the Group result rose by 11.2% to €610.4m. All of the Group’s management KPIs saw a considerable improvement. The Group further reduced its debt level, significantly improved its margins and substantially increased its return on capital employed.
Dividend for 2020
Forecast for 2021
* preliminary data prior to ETS audit
Additional information as well as non-financial KPIs can be found in the Integrated Annual Report 2020, available on the website www.verbund.com > About VERBUND > Investor Relations > Latest financial results.
Head of Group Finance, M&A and Investor Relations
T.: +43 (0)5 03 13 – 52604
F.: +43 (0)5 03 13 – 52694
17.03.2021 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
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