Atel substantially increased both turnover and profits in 2005, thanks to higher volumes in the energy business and rising energy prices. The performance of European trading and sales was particularly encouraging. Atel was active in 26 European countries in 2005. Trading business generated excellent results. The Energy Services segment also achieved operating improvements; the increase in earnings being helped by accounting changes and by positive financial and tax effects. The earnings generated are all the more remarkable against the backdrop of protracted production stoppages, higher transport costs and other extraordinary charges.
Increase in turnover thanks to the energy business The consolidated net turnover of the Atel Group rose by 24.9% in 2005 to CHF 8.58 billion, while electricity sales increased by 8% to 98 billion kilowatt-hours (kWh). There was a further slight increase in the proportion of Group turnover accounted for by the energy business, from 80% to 82%. The increase in turnover was due to both higher sales volumes and higher prices. Geographically, Atel’s supply portfolio in the Energy segment remains well diversified; about one third of its turnover is generated in southern Europe, 16% in central and eastern Europe, and 8% in Switzerland and northern Europe, especially Germany. The Trading division, which is active throughout Europe, accounted for 29% of turnover – and this figure is on an upward trend. In addition to its physical energy deliveries in 2005, Atel conducted futures transactions with standard products with a volume of 150 billion kWh (+ 38%), to the value of CHF 8.3 billion (+65%). Trading profits from these transactions, which are included in net sales, reached CHF 41 million.
Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) were practically unchanged from the previous year at CHF 737 million. Operating earnings (EBIT) rose by 9.7% to CHF 541 million. These net figures conceal an encouraging improvement in operating earnings from market activity. The discontinuance of goodwill amortisation and higher investment earnings both increased EBIT, while it was reduced by the stoppages at power stations in Leibstadt and Italy, reduced hydroelectric power generation in Switzerland, higher charges from value adjustments on receivables and supplementary claims by suppliers – together with the collapse in earnings at Entrade. Successful operating market activity made up for these extraordinary charges to a greater extent than had been expected.
The resulting group profit of CHF 413 million, up by CHF 72 million or 21.1% reflects both successful business activity and the special effects contained in earnings.
The Board of Directors is proposing an increase in the dividend from CHF 24 to CHF 28 per registered share. The average number of employees rose in consequence of growth and acquisitions by 6.3% to 8,368, of whom 605 were apprentices. The rise in turnover, especially energy transactions conducted for trading purposes, resulted in increases in current and total assets. Even so, the balance sheet was strengthened and the equity ratio maintained. Net investment totalled CHF 299 million.
The Energy Services segment – success in a difficult environment The Energy Services segment generated turnover of CHF 1.546 billion, substantially more than the previous year. This sharp improvement in operating results is all the more remarkable against the backdrop of only slightly improved economic activity in Germany and Switzerland. Market and competitive conditions remained difficult, with heavy pressure on margins. At CHF 65 million, consolidated operating earnings (EBIT) were no less than CHF 44 million ahead of the previous year. The business portfolio, with the four business areas, posted a stable performance with virtually unaltered figures. Disinvestments by the GAH Group will lead to a reduction in turnover in 2006.
2006: ambitious targets In the Energy segment Atel intends to continue its expansion in European trading and sales in 2006, and to pursue further growth in generation capacities by means of selective acquisitions. In the Energy Services segment Atel intends to consolidate the present structure and at the same time make use of opportunities to pursue continued profitable development. For the Group as a whole – subject to extraordinary events – Atel expects further increases in both sales and turnover in 2006. Against the backdrop of advancing liberalisation, and of procurement and transport costs that are both on an upward trend, it will be very demanding to repeat the encouraging operating earnings generated in 2005.
Aare-Tessin Ltd. for Electricity Corporate Communications
NB: The 2006 Annual General Meeting will be held on 27 April 2006 in the Stadthalle, Olten.