Lower Hydropower Generation for Verbund

 Apart from a poor water supply, European wholesale prices for electricity remained relatively low thus also negatively impacting the results. While these are now rising slightly, they are still at a comparatively low level. Due to the hedging strategy, positive effects of a long-term price increase are expected to be felt in subsequent quarters.

Also the general results of Verbund for quarters 1-2/2010 show a decline: sales, operating result and group result fell compared to the first half of the previous year due to the mentioned low water supply and weak wholesale electricity prices.

In the first two quarters of the current year, the business figures of Verbund displayed the following development: sales revenue fell by 5.1% to EUR1,582.0 million, the operating result sank by 28.4% to EUR382.3 million and the group result was down 41.6% at EUR210.3 million.

According to Austria's biggest electricity company, it is true that the European economy is slowly beginning to recover: Industrial energy consumption is rising and the European wholesale prices for electrical energy are increasing slightly. Clear positive effects on the Verbund result can, however, only be expected with a time lag. This is largely due to the hedging strategy, whereby the largest share of the electricity is sold one year in advance. Therefore economic crisis has delayed effects on Verbund results.

Verbund will continue to invest in the Austrian market with a particular focus on hydropower with long-term profitability and the security of Austria's electricity supply. Priority will be given to the Limberg II and Mellach power plants, which are under construction according to plan, and the completion of the 380kV Austrian high-voltage ring. Investment decision regarding the construction of the pumped storage power plant Reißeck II was taken in quarter 2/2010.

For 2010 as a whole - assuming an average water volume in the second half of 2010 and a further stabilisation of wholesale prices - Verbund expects an approximately 25% decline in the operating result and group result compared to the previous year. Dividends will approach a payout ratio of 45 to 50%.