BKW Half-year results 2015
BERN, 8-9-2015 — /EuropaWire/ — The BKW Group posted good results in the first half of 2015. At CHF 199 million, operating profit (EBIT) was well above the results of the prior-year period, although this is primarily due to a positive currency effect on provisions. Excluding this effect, EBIT is on a par with the high level of the previous year. BKW has therefore managed to almost completely offset the lower electricity prices and negative currency effects in the first half of 2015. Net profit rose by CHF 31 million year-on-year, to CHF 123 million. There will be a change in the BKW Executive Board at the end of the year as Monica Dell’Anna, Head of the Market Division, is leaving the company.
BKW can look back on a first half-year characterised by continued falling electricity prices and an unfavourable EUR-CHF exchange rate for the electricity business. These are also the reasons behind the decline in total operating revenue, which fell by 11 per cent to 1,278 million. BKW did manage, however, to maintain the adjusted EBIT at the prior-year level. Net profit increased to CHF 123 million and is therefore 34 per cent higher than the previous year. BKW continues to be in a very solid position. In the first half-year it reported operating cash flow of CHF 159 million and liquidity of CHF 1.2 billion.
Consistent development of the Services business
BKW is systematically driving forward expansion of its Services business. It has strengthened the infrastructure business through acquisitions and expanded its regional presence in the field of building technology and electrical installations. The acquisition of “ahochn” means BKW now also offers professional expertise in the field of building technology planning. In doing so, it has closed the last gap in the complete value chain for building technology services.
BKW grew its revenue in the field of energy and infrastructure services by 36 per cent in the first half-year. Just under a quarter of this was organic growth. One-off acquisition and integration costs and marked seasonal discrepancies meant that the contribution of the Services business to EBIT remained moderate in the first half of 2015. BKW expects a significant increase in operating profit in the second half of the year.
Low energy prices put pressure on margins in the Energy business
The Energy business comprises the traditional energy business of production, sales and trading. The results are in line with expectations both in regulated production and in sales. The figures for other electricity sales were much lower in the first half-year. Although BKW sold almost the same amount of electricity as in the previous year, the lower electricity prices and negative currency effects caused revenue to fall significantly.
Up to now, BKW has been able to cushion a large part of these negative impacts. In particular, higher production volumes in BKW’s own production facilities (+337 GWh) and successful management of energy positions through trading activities contributed to this. Efficiency enhancements and cost savings in BKW’s own power plants also counteracted the margin erosion.
On the other hand, the energy procured by BKW in the market was cheaper due to currency effects and lower energy prices. The EUR-CHF exchange rate also had a positive impact on provisions for energy procurement contracts denominated in Euros. These were valued CHF 61 million lower, which led to the higher operating profit (EBIT).
Stable contribution to operating profit for the Networks business
The third central field of business for BKW, Networks, made a stable contribution to operating profit in the first half of 2015. Operating profit increased by just under CHF 9 million to around CHF 68 million. On the basis of these figures, BKW was able to increase investment in renewing and expanding its distribution network from around CHF 80 million a year as in previous years to around CHF 100 million. It is therefore guaranteeing quality of supply for its customers in the long term.
Good result expected for 2015
BKW confirms the outlook for the current financial year. 2015 is set to be another good year for the company. Thanks to focused efficiency enhancements and cost management, active management of the energy position, the stabilised Networks business and continued expansion of the Services business, some of the negative effects relating to electricity prices and exchange rates will be offset. BKW is also expecting further strong growth in the Services business. The acquisitions of “Casa delle Nuove Energie” (Italy) and “Solare Datensysteme GmbH” (Germany), among others, have allowed BKW to grow its end customer base by over 200,000 customers in recent months. Overall, BKW expects the results for full-year 2015 to be below the strong figures reported for 2014.
Detailed information on the results can be found in the Half-Year Report 2015, which is available for download at www.bkw.ch/hyr15
Change in the Executive Board
Monica Dell’Anna, Head of the Market Division, has decided to leave the company at the end of the year to take up a new challenge. Between now and her departure at the end of December, Monica will be in charge of the key area of digitisation at BKW and will continue to report directly to CEO Suzanne Thoma. Monica will hand over her operational responsibilities gradually. The tasks will be taken over by the other Executive Board members on an interim basis.
BKW would like to thank Monica for her significant contribution to developing the product and service business in Switzerland and Italy, successfully developing trading activities and consistently focusing on customer benefits in sales. BKW wishes her every success in her future role.
Information for media representatives:
There will be a teleconference with BKW CEO Suzanne Thoma and CFO Ronald Trächsel at 1.30 p.m. on Thursday 3 September during which you will have the opportunity to ask questions regarding the half-year results.
Dial-in information will be provided on request. Please register by emailing email@example.com.
The statements contained in this press release constitute expectations and forward-looking statements. Because these statements are subject to risks and uncertainties, actual future results may differ from those expressed or implied by the expectations and statements. This press release is issued in German, French, English and Italian. The German version is authoritative.