OREANDA-NEWS. In the first quarter of 2014, the EnBW Group, with its workforce of 19,857 employees, achieved adjusted EBITDA of EUR 744.8 million, which reflects a decline of 15.1 percent in a year-on-year comparison. Performance was largely determined by valuation effects from derivatives which made a positive contribution to adjusted EBITDA in the year-earlier quarter. This effect will become less significant as the year progresses. All in all, the earnings trend therefore developed in line with our expectations. In the financial year 2014, EnBW Energie Baden-Wurttemberg AG anticipates that adjusted EBITDA at Group level will settle between 0 percent and -5 percent below the figure posted in 2013. The forecast remains unchanged.

Adjusted EBITDA of the Sales Segment stood at EUR 48.0 million in the first three months of 2014, corresponding to an increase of EUR 24.9 million compared with the previous year's figure. Optimisation measures in the customer portfolio as part of implementing the EnBW 2020 Strategy were instrumental in substantially raising earnings from electricity sales. Gas sale earnings fell short of the level generated in the first quarter of 2013 owing to the mild winter.

Adjusted EBITDA in the Grids Segment declined by 11.7 percent to EUR 277.9 million (previous year: EUR 314.6 million), a development which was mainly determined by lower grid usage fees due to lower distribution volumes caused by the weather-induced downturn in electricity and gas sales. In addition, positive non-recurrent effects from preceding regulation periods no longer applied.

Low precipitation and low water levels meant that the run-of-river power plants generated less electricity. This was the main reason why the adjusted EBITDA of the Renewable Energy Segment fell 21.9 percent to EUR 42.7 million in the first quarter of 2014. In the year-earlier period, favourable operating conditions resulted in above-average generation.

The Generation and Trading Segment saw adjusted EBITDA drop to EUR 373.5 million, down 23.8 percent. This decline was largely attributable to falling prices and spreads in electricity production as well as to the decrease owing to valuation effects from derivatives.

The adjusted Group net profit attributable to EnBW AG shareholders amounted to EUR 292.5 million in the period under review, representing a 29.7 percent decline compared with the previous year's EUR 415.8 million.

Non-operating Group net profit attributable to EnBW AG shareholders amounted to EUR 2.2 million in the first three months of 2014.

The operating cash flow climbed by 79.3 percent to EUR 534.2 million compared with the first quarter of 2013. This increase was primarily due to the balance of trade receivables and trade payables, which is influenced by the mild weather, as well as to effects pertaining to the German Renewable Energies Act (EEG).

Of the capital expenditure in intangible assets and non-current assets totalling EUR 446.4 million (previous year: EUR 143.1 million), around 87 percent was accounted for by growth projects such as the Lausward gas and steam turbine power station, the major EnBW Baltic 2 project and grid expansion. The proportion of capital expenditure in replacement measures stood at around 13 percent in the first quarter of 2014 and was earmarked for the maintenance of existing power stations and grid infrastructure. Free cash flow declined by only 28.7 percent to EUR 181.6 million despite the higher level of capital expenditure.

In mid-March, EnBW took advantage of the favourable capital market environment to issue a hybrid bond in a volume of one billion euros. Thomas Kusterer, EnBW's Chief Financial Officer commented: “As 50 percent of the nominal value of the hybrid bond is recognised as equity and thus as a deduction by the rating agencies, the hybrid bond has resulted in adjusted net debt declining by EUR 500 million. This strengthens EnBW's good credit rating further.” The maturity profile of EnBW bonds remains balanced. In the financial year 2014, no bonds are due for repayment.