Major contributions from trading and sales

Kurt Bobst, CEO:

“Considering the challenging operating environment, 2011 was a positive year for Repower. In addition to a good operating result, we were able to make solid progress in developing our strategic projects.”

Major contributions from trading and sales

Margins from trading in Switzerland and Italy as well as sales in Italy made a decisive contribution to the result. Our trade experts used their skills to identify and capitalise on the few opportunities in electricity and gas trading in the difficult European environment. Gas trading was further expanded in Italy and became a very profitable business: gas sales in trading were four times the previous year's figure. Combined with the increase in volume from distribution, total gas turnover volume in 2011 was 591 million cubic metres.

Sales margins in Italy, Switzerland and Germany were successfully improved overall. This development had a particularly positive impact on sales in Italy. The Italian market accounts for more than two thirds of the Group's overall sales volume and contributed to a further increase in sales of electricity and gas compared with the previous year. In contrast, the emerging Romanian market delivered a negative result. Particularly troublesome for Repower were the considerably higher procurement prices that came about primarily due to the lower hydraulicity and government intervention. The measures necessary for optimising procurement and sales are currently being implemented.

The period just concluded was characterised by several exceptional effects which can be placed into three categories. While a number of regulatory effects taken overall had a positive impact on the result, various exceptional writedowns – including the value adjustment of the Romanian subsidiary as well as a decrease in value for IT systems – weighed down the operating result. The financial result was negatively impacted by currency factors and by the value adjustment of the minority share in the Brunsbüttel project. In addition, the further increase in profit from Italy led to a higher tax rate. The impacts of the three categories of exceptional effects effectively balance each other out and in the end have only a negligible effect on the Group result.