03/05/2014, 07:00
| Ad hoc announcement pursuant to Art. 53 LR
The Alpiq Group posted a net revenue of CHF 9,370 million and EBITDA of CHF 789 million, as well as a net profit of CHF 18 million in the 2013 financial year. Net debt dropped by half from CHF 4 billion to CHF 2 billion. This was primarily achieved through hybrid financing of CHF 1 billion and divestments amounting to around CHF 690 million in the year 2013.
Alpiq posted a net revenue of CHF 9,370 million (previous year: CHF 12,723 million) and EBITDA of CHF 789 million (previous year: CHF 1,212 million) in 2013. EBIT amounts to CHF 279 million (previous year CHF -924 million); net profit is CHF 18 million (previous year: CHF -1,094 million). Adjusted for exceptional items, the reduced EBITDA reflects a decreased business portfolio after divestments, the negative effects caused by regulated markets, and the continuous drop in electricity prices.
Net debt reduced by half Net debt was substantially reduced to CHF 2 billion (previous year: CHF 4 billion), due to the successful placement of a CHF 1-billion hybrid bond, and the sale of selected non-strategic interests amounting to approximately CHF 690 million, as well as an operational cash flow of CHF 670 million (2012: CHF 466 million). Since 2012, total divestments amounting to CHF 1.6 billion were realised. Alpiq has a high liquidity of CHF 2.4 billion at its disposal.
Market distortions put pressure on conventional power plants In 2013, Alpiq generated approximately 17.2 terawatt hours (TWh) of electricity (2012: 20 TWh). The main reason for lower electricity production is the decreased operating hours of gas-fired combined-cycle power plants. Additional factors were a longer than planned revision of the Gösgen nuclear power plant, as well as lower procurement volumes from long-term contracts at Swiss borders. Investments in increased safety at nuclear power plants resulted in higher production costs. Electricity production from coal-fired power plants was higher than in the previous year. Alpiq’s wind farms and small hydroelectric power stations produced significantly more electricity than in 2012. Hydropower production was also higher than in the previous year, mainly due to the various revisions that were carried out in 2012. Hydropower, in particular, has come under more and more pressure as a result of low wholesale prices. High public duties, water rights rates, and taxes compound the difficulties in hydropower production. Renewable hydropower is in direct competition with subsidised renewable energies and cheap coal-generated electricity, which has been benefiting from low CO2 prices. In the operating year, wholesale prices again dropped by 25%. This resulted in impairments amounting to net CHF 275 million, which negatively impact the results. A one-off positive effect was generated through the court awarded compensations for illegally levied ancillary service costs in Switzerland.
Successful energy trading The wholesale business in Central and Eastern Europe developed successfully in 2013. Alpiq is active in all the relevant markets and benefits from its widely diversified portfolio with many different cross-border trading opportunities. Due to the commercialisation of its own flexible power plant capacities, the decline in earnings was partially compensated by successful business optimisation.
Energy services – Expanding market leadership In energy services, Alpiq was able to exceed the previous year’s results in Switzerland. Alpiq is already the market leader in Switzerland for building and traffic technology and intends to further expand its position, particularly in the area of energy efficiency. The company’s plant engineering and service business was impacted by cautious investments in conventional power plant technology and the declining demand for nuclear technology in Germany. Alpiq will expand its core competence in this area, particularly in power station dismantling and the provision of services for industrial plants.
Outlook The persisting, strong subsidies for wind power and photovoltaics, as well as low coal and CO2 prices, and low electricity demand in many EU countries due to the economic environment will continue to put pressure on wholesale prices. In addition, further regulatory and fiscal measures, such as the recent decision on an additional levy for all wind and solar farms in Bulgaria, could further reduce margins. Additionally, nuclear and hydropower product costs will continue to increase.
In order for Swiss hydropower to be able to play a central role in the energy policy turnaround, politics and the industry are now called upon to create the necessary framework conditions so that this sustainable energy source, so important to Switzerland, can be profitably operated in the future.
The current operating result is sustained by higher prices for forward contracts, which were traded on the electricity market two or three years ago. In the meantime, these prices have continued to drop and will impact these results in the coming years.
At the end of 2013, the company approved a new strategy and has already begun with the transformation of the Group. Alpiq will develop from a capital intensive power producer to an energy service provider with innovative, full-service solutions. This will put Alpiq in a sustainable, competitive position in the new market environment.
Unchanged dividends The Board of Directors proposes an unchanged dividend of CHF 2 per share from the capital contribution reserves.