Energy Segment overview

 

 

Unit

 

1st HY
2018/2019

 

1st HY
2017/2018

 

Change

Total sales

 

EUR mill.

 

582.6

 

539.0

 

8.1%

EBIT

 

EUR mill.

 

51.4

 

70.0

 

-26.6%

Investments in property, plant and equipment and intangible assets

 

EUR mill.

 

5.9

 

7.1

 

-16.9%

Workforce (on average)

 

FTE

 

433

 

430

 

0.7%

Electricity procurement 1)

 

GWh

 

8,538

 

8,294

 

2.9%

Proprietary electricity procurement

 

GWh

 

1,731

 

1,615

 

7.2%

Electricity sales volume

 

GWh

 

3,621

 

3,675

 

-1.5%

Natural gas sales volume

 

GWh

 

3,870

 

3,559

 

8.7%

Heat procurement

 

GWh

 

993

 

957

 

3.8%

Heat sales volume

 

GWh

 

898

 

870

 

3.2%

1)

incl. third-party procurement

The economic environment of the energy industry

In the first half of the 2018/2019 fiscal year, forward market prices for electricity for delivery in the year 2020 moved within a comparatively wide corridor from around EUR 48.6/MWh to EUR 57.3/MWh. The trend in electricity prices saw a decrease during the reporting period, accompanied by major price volatility. The main influencing factors here were the prices for coal and CO2 allowances. At EUR 52.5/MWh, however, the average price was around one-quarter higher than the previous year's value.

Also on the spot market, prices increased compared with the same period of the previous year. During the reporting period, the average European Power Exchange (EPEX) spot price base for delivery in Austria was EUR 52.6/MWh, accompanied by a continuing volatile development.

With regard to the separated price zones between Austria and Germany, initially with significantly higher prices in Austria, the situation eased considerably towards the end of the reporting period. Thus the price difference over the first six months of the 2018/2019 fiscal year was slightly above expectations at an average of approx. EUR 5.8/MWh. The spread for the 2020 annual base has also been relatively stable for some time, trading around EUR 3.8/MWh.

Hard coal prices have declined significantly in the past six months. Starting at USD 99.0/t at the beginning of the fiscal year, the All Publications Index#2 (API2) for delivery in 2020 to the Amsterdam-Rotterdam-Antwerp Coal Trading Area (loco ARA) had dropped to only USD 72.0/t by the end of March. The reasons for this are a strong global supply situation and comparatively weak demand.

The oil price fell from a high of USD 84.5/barrel of Brent crude oil at the turn of the year to a low of USD 68.4/barrel at the end of the first half of the year.

Although the NetConnect Germany (NCG) gas price for the front year 2020 was significantly above the average for the comparable period of the previous year, it fell from EUR 23.6/MWh at the beginning of October to EUR 18.9/MWh at the end of March in the first half of the fiscal year 2018/2019.

The most significant fluctuations were recorded in the price of CO2 emissions allowances. During the reporting period, prices fluctuated between around EUR 15.9/t and EUR 25.3/t. In particular, the concern about an unregulated Brexit and the associated effects on the European emissions trading system repeatedly provoked rapid price movements.

Price development on international energy markets

Source: EEX, Reuters; index 01.10.2017 = 100

Business development in the Energy Segment

In the first half of 2018/2019, the Energy Segment achieved a sales increase of 8.1% with total sales of EUR 582.6 million. Declining sales revenues from gas management were more than offset by increased sales revenues in electricity trading and the increased use of the CCGT (combined-cycle gas turbine) power plants in Timelkam and Laakirchen.

The EBIT of the Energy Segment was EUR 51.4 million in the reporting period; this is equivalent to a drop of 26.6%. This was mainly due to lower earnings contributions from the use of the Timelkam CCGT power plant for grid reserve and congestion management as well as lower earnings contributions from electricity and gas sales due to higher procurement costs. In addition, the significantly lower water level compared with the previous year contributed to the fall in EBIT in the Energy Segment.

In the period under review, higher electricity price expectations and the positive effects of the new System Utilisation Tariff Ordinance resulted in reversals of impairment in the amount of EUR 6.6 million (previous year: EUR 5.0 million) for the Timelkam CCGT power plant. In addition, a reversal of impairment in the amount of EUR 1.9 million for Cogeneration Kraftwerke Management Oberösterreich GmbH (CMOÖ GmbH) had had a positive effect on EBIT in the previous year.

More thermal electricity generation, less electricity procurement from hydroelectric power

Total electricity procurement in the Energy Segment in the first half of 2018/2019 totalled 8,538 GWh and was therefore 2.9% higher than in the previous year (8,294 GWh). At 1,731 GWh, proprietary electricity procurement also grew by 7.2% compared to the previous year (1,615 GWh). This increase is mainly due to growth in thermal electricity generated.

Electricity production from thermal capacities in the Energy Segment was at 585 GWh in the reporting period, increasing by 63.0% compared to the previous year's value of 359 GWh. Due to the rise in electricity prices compared with the previous year, coupled with relatively stable gas prices, it was again possible to utilise the Timelkam CCGT power plant, which is generally kept available for grid reserve and congestion management, on the market in the winter half-year. CMOÖ GmbH also benefited from the current market situation and made a positive contribution to electricity production from thermal capacities through market-based use of a gas turbine.

The provision of district heating from the power plant locations in Riedersbach and Timelkam fell by 6.9% compared with the previous year (188 GWh) to 175 GWh.

Although the water level in the first half of 2018/2019 was 12.9% above the long-term average, the proprietary electricity procurement of Energie AG's hydraulic power plants remained 9.5% below the figure for the same period of the previous year due to the very high water level in the year before. The hydro coefficient of the Group's own power plants and procurement rights was thus 1.13 in the reporting period (previous year: 1.24).

Ennskraftwerke AG, in which Energie AG holds a participating interest of 50%, reported a hydro coefficient of 1.18 and was therefore above the long-term average in the first half of the 2018/2019 fiscal year. All told, Energie AG holds electricity procurement rights in hydropower plants with a standard production capacity of around 1,390 GWh.

Energie AG's wind power portfolio in Austria remains unchanged with participating interests in three wind parks and a pro rata overall performance of nearly 13 MW. Generation from wind power in the reporting period was about 22 GWh (previous year: 19 GWh). Construction work on a 1.6 MW wind power facility is currently in progress.

Successful customer loyalty in electricity sales

The switching rate on the Austrian electricity market published by E-Control Austria shows that the number of switches in the 2018 calendar year declined for the first time since 2015: while in 2017 4.3% of customers switched electricity providers, this figure was only 4.1% in 2018.

Electricity sales volume

GWh

In the commercial and private customer segment of Energie AG Oberösterreich Vertrieb GmbH & Co KG, an even more pronounced decline in the absolute supplier switching figures was recorded in the first half of the year, at slightly more than 30% compared with the previous year.

In the first half of the fiscal year 2018/2019, the consolidated electricity sales volume amounted to 3,621 GWh, 1.5% below the previous year's sales volume in the amount of 3,675 GWh. Declines were recorded in the industrial sector and among commercial and private customers. With business customers, on the other hand, a slight increase in electricity sales was achieved.

The private customer segment continues to be a strong focus of competition. It has been possible to operate successfully in this dynamic market due to the price guarantee in effect until 1 January 2020 as well as to numerous other measures. Digitalisation has increasingly moved into the focus of product developments.

Successful business figures in natural gas, heat and energy services

Natural gas sales volume

GWh

The natural gas sales volume in the Group amounted to 3,870 GWh in the first half year and was thus 8.7% up on the previous year's value of 3,559 GWh. The current winter caused a slight decline in space-heat-driven sales volumes for business and private customers compared with the colder previous year, which was offset by additional volumes for customers newly acquired by the online brand “gasdiskont.at”. In the key account segment, the Group again succeeded in achieving a significant increase in volume compared with the previous year. All existing customers were retained and new customers acquired.

The total number of heating degree days in Upper Austria in the first half of the year 2018/2019 was 9.2% below the average for the previous 10 years, and 9.0% below the previous year's figure.

A loyalty campaign for gas customers with a price guarantee for existing business and private customers ends on 31 December 2019; an appropriate follow-up campaign is in preparation. On average, in this industry, the switching rates in the business and private customer area in Austria again rose slightly in the reporting period. The success of active customer care and customer loyalty measures at Energie AG Oberösterreich Power Solutions (Energie AG Power Solutions) is reflected in a switching rate well below the Upper Austrian and Austrian average. In the first half of 2018/2019, it was even possible to slightly reduce the Group's switching rate compared to the previous year.

In the energy services business area, the heat sales volume from contracting plants amounted to 105 GWh in the first half of the reporting period, and thus below the previous year's figure of 111 GWh due to ambient temperatures. Weather-related decreases were compensated for to a great extent by further growth in the contracting sector.

CMOÖ GmbH supplies a key account customer in Laakirchen with electricity and process heat through a CCGT power plant, as well as several adjacent companies with district heating. The volume of process heat and district heating provided to customers in the first six months of 2018/2019 was 391 GWh and thus 18.1% up on the previous year's figure of 331 GWh.

In the field of photovoltaics, 10 new photovoltaic (PV) contracting projects with 2.2 MWp and 4 projects with 0.5 MWp were agreed in general contractor agreements with business customers in the reporting period. The OeMAG Abwicklungsstelle für Ökostrom AG has already guaranteed the requested subsidies for all plants. The implementation of the projects is planned for the second half of the fiscal year. The current PV portfolio thus comprises 45 plants with average annual electricity generated of 8.2 GWh and an output of 8.2 MWp.

Heat sales volume

GWh

Despite milder temperatures compared with the previous year, the first half of 2018/2019 in the Heat business unit was characterised by a successful course of business. Efficiency measures in procurement management made it possible to compensate for the negative effects of the milder winter. In addition to this, the modern electricity generation facilities at the sites guaranteed a high degree of supply reliability and quality throughout the entire heating season.

The waste heat project started in the first half of 2017/2018 in Gmunden with an established industrial partner is proceeding according to plan. Following the seasonal interruption of the district heating network construction work, network construction activities were resumed towards the end of the first half of 2018/2019 and the second construction stage was started. Due to its use of industrial waste heat, this project enables a significant step to be taken towards ecologising and increasing the efficiency of the heat supply in Gmunden with CO2 savings of around 3,800 tons per year.

In total, the heat sales volume in the Energy Segment amounted to 898 GWh in the first half of the year 2018/2019, an increase of 3.2% on the previous year (870 GWh).

Successful market launch of the charging card for e-mobility

In the field of electromobility, the charging card valid throughout Austria was successfully launched on the market in December 2018. Charging card operations and billing are running smoothly. The construction and operation of the public basic charging infrastructure has thus been completed. There are currently 22 Energie AG charging stations with 42 charging points in the charging station network.