Last December, in an outlook for the coming months, EGL anticipated that the 2009/10 financial year would be even more challenging than last year. The current gross margins in the energy trading and assets area correspond to expectations. As a result, the gross margin is in line with last year, but various factors have substantially affected expenditures.
Due to the difficult economic environment, sale of the planned gas-fired combined-cycle power plant project, Energy Plus, in Italy could not yet be realised. In particular, one-off costs stemming from nonfulfillment of project contracts have reduced the result for the 2009/10 financial year. Unplanned, additional expenditures were also incurred due to the block 3 outage of Eléctricité de France’s nuclear power plant, Bugey, with whom EGL holds a long-term power procurement contract. To compensate this effect, shortages must be procured on the market at higher prices.
The natural gas market remains strained. Supply backlog due to lower demand has led to decoupling of gas and oil prices. As a result, EGL is renegotiating prices in order to obtain purchasing conditions in line with the market. In addition, the weak Euro vis à vis the Swiss franc will likely decrease earnings for the 2009/10 financial year.
For the current financial year, EGL anticipates a gross margin in line with last year. At present, it can be assumed that the net profit will be about half of last year’s level (2008/09: CHF 186.7 million), whereby the factors affecting the cost side will disproportionately burden the first half-year. Measures to reduce costs have already been instituted. Despite hindering effects in the short-term, EGL holds to its long-term strategy of further strengthening its position in the European energy-trading sector.
Further information
Media Relations: Tel. +41 44 749 40 10, media.ch@egl.eu
Investor Relations: Tel. +41 44 749 46 15, investor.ch@egl.eu
