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DGAP-Adhoc: VERBUND AG: Adjustment of earnings forecast for 2014

July 10, 2014

VERBUND AG / Key word(s): Results Forecast/Forecast 10.07.2014 10:29 Dissemination of an Ad hoc announcement, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Today, the management of VERBUND AG announced the adjustment of the earnings forecast for financial year 2014. Based on the updated forecast, VERBUND will generate EBITDA of around EUR690m (previous forecast: EUR850m) and a Group result of around EUR70m (previous forecast: EUR150m). The planned dividend still focuses on a payout ratio of approximately 50% of the adjusted Group result. The 2014 adjusted Group result will amount to approximately EUR150m. This adjustment of the earnings forecast can be attributed to the following reasons: - Low water supply The water supply of 93% was significantly below the long-term average in the first half of 2014, and as a result, the planning assumptions for an average water supply for the full year 2014 could not be maintained. The negative effect of the low water supply amounts to EUR29m in EBITDA and EUR16m in the Group result. An average water supply is assumed for the remainder of 2014. - Difficult market environment The persistently difficult market environment and continued pressure on the European wholesale prices are having a more negative impact on earnings than planned. Excess electricity volumes therefore have to be sold at lower spot market prices. In addition, preliminary project costs for a wind farm in Romania and part of the net investment in the Albanian company Energji Ashta were written off. These effects have an adverse effect of EUR45m on EBITDA and EUR41m on the Group result. - Effects related to the resolutions for decommissioning of thermal power plants On 14 May 2014, VERBUND resolved to temporarily decommission the Mellach, Pont-sur-Sambre and Toul combined cycle gas turbine power plants and to close the DÜrnrohr hard coal power plant as well as the Neudorf/Werndorf II oil-fired district heating plant. There are expenses associated with the temporary or final closure of the power plants and the remeasurements of the temporarily decommissioned thermal power plants. In total, these effects have an adverse effect of EUR118m on EBITDA and EUR36m on the Group result. - Reduction in expenses Adjustments to the equity interest portfolio initiated by VERBUND along with additional ongoing measures to reduce expenses associated with the implementation of the cost-cutting programme and the continued focus on investments serve to improve the result. The adjustment of the earnings forecast is the result of a non-functioning pan-European electricity market characterised by massive regulatory intervention. The heavy oversubsidisation of new renewable energy sources, a non-functioning CO2 market and massive excess capacities in electricity generation are exerting enormous pressure on the profitability of European utilities. VERBUND is counteracting this trend with the restructuring in the area of the thermal power plants, cost-cutting programmes and a focus on the investment programme. In addition the company expands its portfolio with energy related services and solutions. 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.com10.07.2014 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: VERBUND AGAm Hof 6A 1010 Wien Austria Phone: 0043-1-53113-52616 Fax: 0043-1-53113-52694 E-mail: investor@verbund.com Internet: www.verbund.com ISIN: AT0000746409 WKN: 877738 Indices: ATX Listed: Wien (Amtlicher Handel / Official Market) End of Announcement DGAP News-Service ---------------------------------------------------------------------------


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Source: DGAP Ad Hoc Disclosures


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