German EnBW Back in Black, Thanks to Gas
Germany's third largest power generator Energie Baden-Wurttemberg (EnBW) has reversed last year's nine-month loss of €192.5mn ($224.4mn) into a profit this year of €1.87bn. Its operating result (adjusted Ebitda) of €1.52bn was up 10.8% year on year, it said November 10.
The Karlsruhe-based company said its balance sheet strengthened significantly in 3Q, and that its VNG wholesale gas subsidiary made a positive contribution to earnings. VNG also owns Ontras, which runs the second-longest gas transmission system in Germany at 7,000 km. EnBW net debt was also reduced.
It cautioned that "this temporary better-than-expected result is due in part to positive one-off effects such as the elimination of the nuclear fuel rod tax the previous year, [which] will be offset in 4Q 2017 by lower electricity prices on the forward market compared with the previous year." EnBW though confirmed its forecast for the year, projecting an operating result of between 0 and +5% higher than 2016. Including the effects of full consolidation of VNG, it said EnBW adjusted Ebitda is up 2.1% on the previous year.
"Full consolidation of VNG has had a positive impact on revenue and our operating result. We are expecting to see a stronger contribution to earnings than we had projected in our original planning; in addition, our efficiency measures are also taking effect more quickly than anticipated, which is also having a positive impact on our earnings,” said CFO Thomas Kusterer (see photo, courtesy of EnBW).
The sale by EnBW of a 49.89% interest in the EnBW Hohe See offshore wind farm in February 2017, along with the cancelled nuclear fuel rod tax, helped EnBW reduce net debt fell by a fifth to €8.1bn, compared to €10bn at end-2016.
EnBW is publicly controlled with two major shareholders: the centre-left/Green run southwest German state of Baden-Wurttemberg (46.75%) and a grouping of the region's local authorities (also 46.75%), Since April 2016, it has owned a 74.2% stake in Leipzig-based VNG.
Mark Smedley