In the financial year 2003/04, EGL was able to further expand its energy volume sales in the cross-border market despite market circumstances in which margins were declining. In certain individual markets, however, the group found itself confronted by growth restrictions because at the moment, it only has its own electricity production facilities in Switzerland. In the medium term, however, there are signs of a new boost in growth. Four power plant projects in Italy are ready for construction. Two of them will be going onto the grid in 2007.
Dynamic development of volume sales and turnover
EGL's volume sales and turnover in the financial year 2003/04 are significantly higher than expectations. The group sold 61.2 TWh of electricity (+65%) and 5.2 TWh of gas. Due to the expansion of volumes, turnover grew by 46.8% to CHF 3'219.1 million. For the same reason, procurement costs also rose (+54%), whereas there was a lower in-crease in personnel costs (+1%) and other operating costs (+18%).
The completed financial year, particularly the second half of it, offered fewer trading opportunities than in the extremely eventful previous year. The profit from energy derivative trade therefore fell by CHF 9 million to CHF 16 million. High volatilities characterised the medium-term trade and exerted a positive financial influence.
Profitable start in natural gas business
In the reporting year, EGL was able to establish itself successfully in the European gas market. The natural gas division achieved volume sales of 5.2 TWh (previous year: 1.3 TWh) and thus made a positive contribution to the overall result in its first full year.
Higher operating result - stable net profit
Per 30 September 2004, EGL raised the operating result (EBIT) by 6% to CHF 204.2 million. The financial result of CHF 20.3 million (-37%) was in line with expectations. The tax charge rose to CHF 44.1 million (+30%).
The electricity black-out in Italy in September 2003 and the subsequent reduction of cross-border capacities had a clearly negative financial effect. EGL estimates the lost profit at about CHF 18 million. Nevertheless, the net profit for the financial year 2003/04 was at the level of the previous year. The profit after tax and before minorities amounted to CHF 204.2 million (-1%) and CHF 195.2 million (-3%) after minorities.
Stable equity basis
The balance sheet as at 30 September 2004 showed a slight increase in current assets (+ 12% to CHF1'427.30 million) and equity +17% to CHF 1'185.8 million). The equity ratio at 51.2% was slightly higher than that of the previous year (49.4 %). In the reporting year, the first major investments were made in the new power plant projects in Italy. Due particularly to those investments, EGL's liquidity fell by CHF 50 million to CHF 493 million.
Outlook
EGL is in an intensive phase of development and is implementing its growth strategy with determination. It wants to penetrate additional markets with its core business - the international electricity trade - and further develop the successfully launched natural gas business. By 2008, EGL plans to have its own production capacities in Italy with a volume of approx. 2000 MW. The necessary power plant projects are at an advanced stage of progress and can now be implemented.
This expansion of the business has and will continue to have a dampening effect on results in an initial phase. For this reason, EGL expects that the results of the financial year 2004/05 will be at approximately the levels of the previous year. In the medium-term, however, EGL anticipates a further improvement in its results.
Further information
Media:
Lilly Frei
Tel. +44 749 41 21
lilly.frei@egl.eu
Investors:
Andreas Rudolf, CFO
Tel. +44 749 42 68
