Ad hoc announcement Interim Report/Interim Report Österreichische Elektrizitätswirtschafts AG: Q1/2010 Declining Result in a Difficult Market Environment Ad hoc announcement transmitted by DGAP - a company of EquityStory AG.The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------ Verbund, Austria's leading electricity company, presents a declining result for Q1/2010. Compared to Q1/2009, sales declined by 8.5% to EUR 806.4 million, the operating result fell by 24.1% to EUR 194.3 million, and the group result was down by 39.4% to EUR 119.8 million. The control-specific ratios displayed the following development: The EBIT margin declined from 29.0% to 24.1%, gearing increased from 91.3% to 131.9% and the operating cash flow rose from EUR 207.8 million to EUR 225.1 million. Economic Value Added, the control-specific ratio for value creation within the Verbund Group, sank by EUR 106.0 million to EUR 24.9 million. Ratios Unit Q1/2009 Q1/2010 Change Sales EUR m 881.6 806.4 -8.5% Operating Result EUR m 256.0 194.3 -24.1% Group Result EUR m 197.8 119.8 -39.4% Economic Value Added EUR m 130.9 24.9 -81.0% Gearing % 91.3 131.9 44.5% Operating Cash Flow EUR m 207.8 225.1 8.3% Low wholesale prices and reduced water supply impact result European wholesale prices for electricity continue to list at a relatively low level brought about by the reduction in prices for primary energy sources, low demand for electricity and a low level in CO2 spot market prices. As part of its hedging strategy, Verbund sells approximately 60% of its annual own generation a year in advance and the remaining 40% on the basis of spot market prices and quarterly and monthly forwards. The average price for year base 2010 electricity forward contracts traded in 2009 was EUR 49.2/MWh, 30.0% below the level recorded in the previous year. The electricity spot market price level in Q1/2010 also fell to EUR 41.0/MWh, representing a 13.5% reduction from Q1/2009. The quarterly and monthly forwards relevant to the current interim result also listed significantly below the previous year's level. In addition to the weak wholesale prices for electricity, the below-average water supply from rivers had a negative impact on the quarterly result. The hydro coefficient lay at 0.92 in Q1/2010 and was therefore 8% below the long-term average and 5% below the value recorded in the previous year. However, despite the low water supply, Verbund's hydropower generation rose 4.5% to 5,257 GWh. This can be attributed to the purchase of the power plants on Bavaria's Inn river in August of the previous year and to higher generation by annual storage power plants. Thermal generation rose 30.1 % from the previous year to 1,317 GWh. Verbund's portion of the volume at the POWEO power plant in Pont-sur-Sambre, which began operating at the end of September 2009, accounts entirely for this increase. Concentration, frugality and increased efficiency Because no lasting economic improvement is in sight for Europe at the present time, concentration, frugality, and increased efficiency are a high priority for Verbund at this time. Focus and consolidation dominate the current year. Taking absolute priority will be the Limberg II and Mellach power plants, which are under construction according to plan, and the completion of the 380-kV Austrian ring. Moreover, we are considering further steps to streamline the capital structure and to improve results. Initial results are the signing of the syndicate agreement between EVN and Verbund for the Ashta hydropower plant in Albania. This gives Verbund and EVN each a 50% share in the plant on the Drin river. Intensive negotiations also continue over a participation by Bavarian administrative districts, municipalities and regional authorities in the power plants on the Inn river acquired in August of the previous year. The sale of an initial tranche of holdings is close to being finalised. Outlook Continued challenges in economic conditions and persistently weak wholesale prices for electricity lead us to expect a decline in operating result and group result of about 25% from the previous year for 2010 as a whole. Dividends will approach a payout ratio of 45% to 50%. Further information and the interim report 1/2010 can be seen on www.verbund.at Contact: Andreas Wollein Head of Group Finance and Investor Relations T.: +43 (0)5 03 13 - 52604 F.: +43 (0)5 03 13 - 52694 mailto:investor@verbund.at (c)DGAP 27.04.2010 --------------------------------------------------------------------------- Language: English Company: Österreichische Elektrizitätswirtschafts AG Am Hof 6A 1010 Wien Österreich Phone: 0043-1-53113-52616 Fax: 0043-1-53113-52694 E-mail: andreas.wollein@verbund.at Internet: www.verbund.at ISIN: AT0000746409 WKN: 877738 Indices: ATX Listed: Regulierter Markt in Frankfurt (General Standard); Freiverkehr in Berlin, Düsseldorf, München, Hamburg, Stuttgart; Foreign Exchange(s) Wien End of News DGAP News-Service ---------------------------------------------------------------------------