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Verbund Focuses Investments on Austria

Published: April 12, 2012; 18:32 · (Vindobona)

The Austrian energy company plans investments of € 2.4bn in the next five years. About 66% of these investments will be made in Austria.

Verbund Focuses Investments on Austria / Picture: © Verbund AG

Verbund´s CEO Wolfgang Anzengruber said to be aware of the rating and the low net indebtedness. Regarding the rating, Anzengruber stressed that Verbund is among the best third in Europe. The gearing, which went down to 82% last year, will be kept below 100%, Anzengruber added. Anzengruber retained the price guarantee until 2014. Verbund aims to double its number of customers from 255,000 to 500,000.

Over the next five years, Verbund plans investments worth € 2.4bn. About two thirds will be made in Austria and Bavaria. Other major investments are planned in Turkey (18%) and in Romania (7.5%). In Turkey, where Verbund founded the Sabanci Joint Venture, a growth rate of 6 to 7% is expected this year (after 9% last year). Until 2015, the capacity should reach 5,000 MW. This would correspond to 10% of the Turkish energy market.

In Italy, where Verbund operates the subsidiary Sorgenia, no further capital increase is planned. The participation is still recoverable, however. Anzengruber admitted that the French subsidiary Poweo was a major fault. “We have learned our lesson.” Anzengruber said. Until now, losses reached € 310m in France. At the moment, Verbund does not plan the IPO of its subsidiary APG (Austrian Power Grid). Up to 49% of APG could be privatized.

In 2011, Verbund achieved revenues of € 3.865bn (+16.9%). Energy production rose by 15.6% to 64.4 terawatt hours. The operating result was up by 20% to € 1.0bn, which was due to the revaluation of assets. Net results fell by 12% to € 352.6m. Verbund´s operating cash flow was up by 6.6% to € 830m. This year, Verbund´s shareholders get a dividend of € 0.55 per share. Verbund´s major shareholder is the Austrian state (51%). The dividend pay-out ratio is 54.2%.

For Wilhelm Rasinger, the representative of small investors, the dividend is acceptable. “The 55% payout ratio is within a certain framework, the dividend is arguable.” Rasinger pointed out that there was also criticism against the “self-content” of Verbund. The representative underlined that the results of 2011 were “significantly worse” than those of 2010. “There is still some work to do.” Rasinger hopes that the weak earnings situation in Italy is only temporary. The Turkish market still needs time to become profitable, Rasinger says. “It is important that 2012 becomes clearly better in order to reach higher dividends.”