Responsibility statement of the legal representatives ............................................................................
At a glance
Water supply in quarters 1-2/2021 down on the long-term average at 0.96, but slightly higher than in quarters 1- 2/2020.
Average sales prices obtained for our own generation from hydropower up €2.2/MWh to €46.6/MWh.
Results for the quarters improved: EBITDA (+ 2.5 %) and Group result (+ 4.5 %) up.
Strong performance ofVERBUND shares in quarters 1- 2/2021 (+11.2 %) - significantly better than the STOXX Europe 600 Utilities (-2.9 %) but below the ATX (+22.4 %).
Acquisition of a 51 % stake in Gas Connect Austria GmbH completed as at 31 May 2021 - free cash flow before dividends therefore negative, net debt up.
Earnings forecast for 2021 improved due to strong energy market environment: EBITDA projected to reach between approximately €1,310m and €1,410m and the Group result to between approximately €590m and €660m based on expectations of average levels of own generation from hydropower and wind power in quarters 3- 4/2021 as well as the opportunities and risks identified.
- 41.6 %
Group result adjusted
Earnings per share
Cash flow from operating activities
- 27.1 %
Additions to property, plant and equipment
Free cash flow before dividends
- 144.2 %
Free cash flow after dividends
- 276.5 %
Performance of VERBUND shares
Average number of employees
Electricity sales volume
- 7.5 %
New renewables coefficient
Equity ratio (adjusted)
INTERIM FINANCIAL REPORT Report of the Executive Board
Report of the Executive Board
All in all, we can look back at quarter 2/2021 as a good one. The Group turned in a very satisfactory business performance, the energy market environment continued to improve apace and the Group's long-term positioning across all segments fits seamlessly with the energy sector's increasingly ambitious decarbonisation goals within the EU and in Austria. These positive environmental factors bolster the Group's share price performance. VERBUND's shares were trading at €77.7 as at 30 June 2021, up 11.2 %. The value of VERBUND based on market capitalisation was therefore €27.0bn at the end of quarter 2/2021. This puts the Group at the pinnacle of the ATX by a large margin and makes it one of the largest utilities in Europe - a clear signal that the capital market takes a positive view of the Group's strategy and positioning.
The energy market environment, which is vitally important for our business, continued to improve in the reporting period. Prices for European CO2 emission rights, which are crucial for the switch from carbon-intensivecoal-fired power generation to lower-carbongas-fired power generation, and the prices for primary energy sources, which determine the wholesale price of electricity in Europe, increased significantly. Wholesale electricity prices in Europe, one of the main value drivers of VERBUND's business performance, reached a twelve-year high in quarter 2/2021.
The strong commitment of the EU member states to achieving comprehensive decarbonisation of the energy system provided support here, prompting the European Commission to make further clear decisions on 14 July 2021 as part of the Fit for 55 package aimed at accelerating decarbonisation of the energy system in Europe. It is expected that these decisions will continue to have a positive effect on the energy market environment for VERBUND. The objective is to achieve a 55 % drop in all of the EU's greenhouse gas emissions by 2030 (1990 baseline).
These positive developments in the energy market environment will greatly benefit VERBUND's business model. VERBUND is ideally positioned in this environment as a hydropower producer with an increasing share of new renewables. Our strategy envisages that by 2030 a total of 20-25 % of the electricity VERBUND generates will come from new renewable sources of energy in Europe. The Renewable Energy Development Act (Erneuerbaren-Ausbau-Gesetz, EAG), passed by the Austrian parliament in early July 2021, provides for extensive decarbonisation and climate neutrality by 2040 and thus creates the framework for achieving this ambitious goal. In addition to its activities relating to electricity and gas grids, which also need to be expanded on a large scale to achieve the ambitious climate targets, as well as in electricity trading and sales, VERBUND will move into new fields of application that will play an important role in the successful implementation of the energy transition over the coming years. Examples are the development of a green hydrogen system, the advancement of electromobility and the development of storage systems. VERBUND is thus making a vital contribution to the implementation of Austria's climate strategy.
To realise VERBUND's sustainable strategy at an operational level, we made important decisions and pushed ahead with our projects in quarter 2/2021:
Flexible power plants are necessary to ensure the integration of volatile new renewable energy sources into the power grid. VERBUND will invest around half a billion euros in this area. In mid-June 2021, for example, construction of the Reißeck II+ pumped storage power plant started on the Reißeck lake plateau in Carinthia. VERBUND is currently investing €160 million in the modernisation and expansion of the Malta-Reißeck power plant group in Carinthia, in order to be able to temporarily store the increased
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