Earnings position

Positive sales revenue development

Increasing market prices and sales volumes in the electricity business paved the way for a 20.1 % rise in group sales revenue to € 874.2 million in spite of the drop in grid revenue.

Specifically, electricity revenue (excl. eco-electricity) rose by 22.8 % to € 711.5 million. Strong growth was recorded, above all, in sales to traders (€ 123.9 million) and resellers (€ 39.5 million). End-customer business (€ 31.1 million) declined due to the divestment of VERBUND-Austrian Power Vertriebs GmbH (APC) last year. Foreign markets accounted for 74.9 % of the quantities sold. Germany, France, Slovenia and Italy are the most important foreign markets from a sales perspective. The total increase in quantities sold (incl. eco-electricity), compared to the corresponding period the previous year, came to 5,231 GWh or 26.8 %.

Grid revenue fell by 7.1 % to € 62.7 million. This is largely attributable to the 11 % cut in the tariff with effect from 1 February 2005 which resulted in a drop of € 3.4 million and lower transport volumes.

The steadily increasing volumes in the eco-electricity area combined with higher contributions led to a significant 28.8 % rise in eco-electricity sales to € 87.7 million.

Increasing electricity, grid and eco-electricity purchases

The € 131.4 million increase in electricity purchases (excl. eco-electricity purchases) to € 499.8 million is primarily attributable to the rising purchase prices on the spot and forward markets combined with the significant increase in the volume of electricity purchased externally (48.5 %). Own generation was down 8.6 % (600 GWh) primarily on account of the poor water supply in the period under review (hydro coefficient 0.97, previous year: 1.03). Eco-electricity purchases also increased significantly by € 18.1 million to € 85.5 million on account of rise in the number of plants feeding into the grid. The exclusion of grid purchases by the divested APC had a positive effect on this item in the amount of € 12.5 million.

Decrease in fuel expenses

The 26.5 % drop in fuel expenses and services purchased to € 25.4 million is due, above all, to the cessation of brown coal purchases for the Voitsberg power plant (€ 11.1 million). In addition, the sale of block-type thermal power plants led to a reduction in the volume of natural gas used (€ 1.2 million). Increasing prices for primary energy sources did, however, have a negative impact.

Reduction in employee numbers had positive impact on personnel expenses

The number of employees dropped by 84 (previous year: 180) to 2.435. The staff reductions combined with a higher holiday-consumption rate led to a drop in expenditure for wages, salaries and related expenses (€ 67.3 million; previous year € 72.9 million) in spite of a collective agreement increase of approx. 2.5 %.

Expenses for severance payments and pensions were also lowered by 12.7 % to € 16.7 million. The y-on-y drop in provisions for restructuring measures (€ 2.1 million; previous year: € 11.8 million) had an improving effect, whereas the lowering of the discount rate by 0.25 %-points to 5 % led to a € 6.7 million increase in personnel provisions. Hence, net interest rates of 2.5 % (for candidates) and 3.5 % (for pensioners) are applied.

Other operating expenses displayed positive development

The 14.2 % drop in other operating expenses to € 25.4 million is essentially attributable to the reduction in weather-related repair and maintenance costs.

Improved financing result

Lower valuation-related exchange losses in the amount of € 1.3 million had a positive effect on the financing result. The financing result was also boosted by the drop in interest expenses as a result of the ongoing debt-clearing program.

Significant improvement in result from participating interests

The € 30.0 million increase in the result from participating interests to € 32.6 million was mainly due to the recognition in Q1/2005 of the at-equity result of STEWEAG-STEG GmbH in the amount of € 14.0 million (previous year: € 14.7 million, not recognized in Q1/2004). In addition, the at-equity results of Energia SpA (€ 7.4 million after € 3.7 million), Österreichisch-Bayerische Kraftwerke AG and Ennskraftwerke AG also increased as did the investment inflows from VERBUND-BeteiligungsgmbH (€ 4.3 million).

Income tax expenses remained stable

Income tax expenses have remained at more or less the same level as in the previous year in spite of the significant increase in pre-tax earnings. This is largely attributable to the lowering of the corporate tax rate to 25 % as well as to the high, non-tax-effective investment income from participating interests consolidated at equity.