Semi-annual results

Chairman of the Board of Directors Dr. Eduard Rikli (left) and CEO Kurt Bobst.

The economic situation remained extremely difficult in the first half of 2012. The financial and sovereign debt crises of the eurozone countries dampened demand, driving down energy consumption in the corporate sector. The euro exchange rate has come under further pressure in recent months, and while the Swiss National Bank's commitment to enforce a minimum Swiss franc/euro exchange rate has eased the situation to some extent for Swiss companies who generate much of their revenue in euros, the exchange rate situation remains unfavourable and there is no rapid improvement in sight. Prices on energy markets have declined further since last year. This applies in particular to prices for medium- and long-term electricity products (calendar prices), with the exception of some countries in Eastern Europe, where electricity prices are high due to state intervention and dry weather conditions. While energy prices are influenced by the economic situation and by weather conditions, prices on electricity exchanges are being significantly driven down, due in particular to market distortion caused by feed-in tariffs for wind and solar power.

Sound result in a difficult market environment

In the first half of 2012, the Repower Group posted total operating revenue of CHF 1.17 billion (- 5 %) and EBIT of CHF 53 million (- 9 % compared to the prior year). These figures are in line with the expectations announced in spring and represent a sound result given the current market situation. Positive contributors to the result were the trading activities in Switzerland and Italy, where Repower succeeded in positioning itself well despite the difficult market environment and low prices. At 7,617 gigawatt hours, energy sales were well below the prior-year figure (- 23 %). The higher volume of electricity generated from Repower's own wind farms and hydropower plants (358 GWh in all, representing an increase of 19 %) was well utilised on the market. Conversely, low liquidity in the markets of Eastern Europe had an unfavourable effect on electricity trading in this region.

Margins from sales also made a positive contribution to the result, with the total volume of electricity sold rising by six per cent to 3,359 gigawatt hours. Finally, the gas business continued to perform well, with Repower posting a thirty per cent increase in gas sales in trading year-on-year. Together with sales, a total of 327 million cubic meters of gas were sold.

Group profit ended the first six months of 2012 at CHF 20 million (- 37 %). The main factors weighing on group profit were the losses resulting from exchange rate and interest rate trends in the first half of 2012. Moreover, the tax expense is very high due to the substantial share of results accounted for by Italy.