The first half of 2016 saw major changes in Repower's corporate structure, with delisting from the Swiss stock exchange, the introduction of registered shares, two new main shareholders, an increase in capital, and new members on the Board of Directors. The group's operating income (EBIT) were up on the prior-year period.

Dr Pierin Vincenz
Chairman of the Board of Directors

Key events

In the first half of 2016 Repower achieved some important milestones in terms of implementing the new strategy announced in December 2015. On 28 April 2016, Repower AG bearer shares and participation certificates were traded for the last time on the SIX Swiss Exchange. The following day saw commencement of over-the-counter trading in the company's securities on Berner Kantonalbank's OTC-X platform. The conversion of Repower bearer shares and participation certificates into registered shares simplified matters further. On 30 May 2016 Repower announced that it was planning to raise additional capital by means of a rights issue and would be acquiring two new shareholders, Elektrizitätswerke des Kantons Zürich (EKZ) and UBS Clean Energy Infrastructure Switzerland KGK (UBS-CEIS). The extraordinary general meeting (EGM) of shareholders held for this purpose on 21 June 2016 approved the decision to increase the company's capital by means of a rights issue. With EKZ and UBS-CEIS contributing around CHF 90 and 60 million respectively, and public shareholders CHF 21.2 million, the move raised a total of CHF 171.3 million (figure rounded off) for Repower. This enabled Repower to strengthen its capital base, reduce its net debt, and implement the measures involved in the strategic realignment. Following the resignations of Dr Eduard Rikli (chairman), Dr  Manfred Thumann, Dr Rudolf Huber, Placi Berther and Gerhard Jochum, the EGM elected Dr Pierin Vincenz, Dr Urs Rengel, Roland Leuenberger and Peter Eugster as new members of the Board of Directors. Together with existing members Dr Martin Schmid, Claudio Lardi and Rolf W. Mathis, the Board of Directors now reflects the new shareholder structure. From its ranks the board elected Dr Pierin Vincenz as its new chairman.

Operating environment and results

Market prices in international energy trading continued to drop at the beginning of the year before staging a recovery, the like of which had not been witnessed for a long time. Prices for 2017 in Germany recovered from their low of around EUR 21/megawatt hour to more than EUR 28/megawatt hour at times.

The EUR/CHF exchange rate recovered slightly in the first half of the year. But plenty of uncertainty remains on the foreign exchange front, not least because of the UK's plans to exit the European Union.

Total operating revenues came in at CHF 881 million, 4 per cent down on the prior-year period. The group's operating income (EBIT) was higher than the prior-year period at CHF 45 million (vs CHF -34 million in the first half of 2015). Positive contributory factors were impairment gains on tangible assets totalling around CHF 17 million and the release of provisions for long-term agreements amounting to some CHF 5 million. Impairment of around CHF 3 million on receivables at Sales in Italy had a negative impact on results. Net profit came to CHF 18 million for the first half of 2016. On 30 June the equity ratio was 35 per cent, a slight improvement versus the end of 2015 (33%). There was a very healthy development in cash flow from operating activities in the first half of 2016 thanks to a better operating performance.

Strategy

In addition to the measures already outlined, Repower continued to work hard to drive implementation of its new strategy forward. The launch of Plug'n Roll, a comprehensive service offering around electric vehicles, and further work for third parties, marked another step in Repower's evolution into a service and sales company. This also includes efforts to strengthen the sales organisation in Switzerland as part of the partner strategy and expand the sales network in Italy. The company also worked on planned divestments, and has already found a buyer for the Romanian business in the form of the MET Group.

Kurt Bobst
CEO

On the generation side, Repower for the first time adopted an innovative financing model involving a partner for the renovation of the Morteratsch power plant; it also did work to enhance the Cavaglia and Palü installations to boost generation at the Cavaglia plant and make it eligible for the feed-in remuneration at cost (Kostendeckende Einspeisevergütung, KEV) scheme.

Thank you

Particularly in times of major change, the backbone of a business is its employees, shareholders and customers. We would like to thank all these people for their loyalty and trust in the first half of 2016.

Outlook and perspectives

Looking ahead, the energy industry will continue to face a number of hurdles. Despite this, as things stand at present Repower looks set to post better operating income (before exceptional items) than in 2015. In the first half of 2016 Repower set the cornerstones of its realignment by increasing its capital and getting new shareholders on board. In the coming months the company will continue to work hard to implement its new strategy and equip itself for further changes in the energy industry environment.

Dr Pierin Vincenz
Chairman of the Board of Directors

Kurt Bobst
CEO