“Thanks to Repower, guests at our campsite get to explore the Poschiavo valley by electric bike.”

Damiano and Marisa Priuli-Bondolfi run the Boomerang campsite in the hamlet of Li Curt in the Poschiavo valley. Electric bikes from Repower are the ideal solution for those wanting to explore the area on two wheels.

Comments on the consolidated financial statements of the Repower Group

Market environment continues to hit Repower Group results hard

Challenging market environment once again results in impairments in year under review – downtrend in energy trading continues

Repower's year-end results for 2015 are sobering. A challenging market environment, with steadily declining electricity prices, had a massive impact on financial results. Added to this was the decision to remove the floor on the EUR/CHF exchange rate in mid-January 2015.

The total impact of negative extraordinary items on the results for the year came to CHF 90 million. These items notably included a net CHF 62 million in impairment on generation assets, CHF 12 million in impairments on overdue receivables in Italy, and provisions for energy agreements and other energy-related liabilities totalling CHF 7 million. The results were also impacted by an adjustment of CHF 9 million to the item associates on the basis of a change in accounting methods related to the AKEB decommissioning and disposal fund.

All in all, the 2015 financial year ended with earnings before interest and tax (EBIT), after extraordinary items, of negative CHF 69 million. Income before taxes came to negative CHF 152 million, resulting in an annual loss of CHF 136 million for the year under review.

To give a realistic picture of financial performance during the year under review, the comments on the Repower Group's financial results for 2015 refer primarily to achieved operating earnings before exceptional items. Comparisons with the prior year are also made on the basis of results before exceptional items. Comments relating to the balance sheet are based on figures after exceptional items. Remarks related to the IFRS financial reporting standards and more detailed explanations in this context can be found from page 48 of the 2015 financial report.

In the year under review the Repower Group saw total energy sales fall CHF 18 per cent to CHF 1,838 million from CHF 2,231 million the previous year. The downward trend in the energy trading business thus continued – particularly evident in a 25 per cent decline in gross energy margin before extraordinary items, down CHF 61 million from CHF 246 million to CHF 185 million.

Operating expenses (without energy procurement) declined by around CHF 17 million year on year to CHF 181 million (from CHF 198 million the year before), owing primarily to lower personnel costs (down CHF 6 million) and operating expense (down CHF 11 million). These savings are still directly connected with the efficiency programme launched in the 2013 financial year.

Scheduled depreciation/amortisation and impairment, without one-time impairment charges, came in at CHF 47 million, a decline of around CHF 4 million versus the previous year (CHF 51 million). This decline was due to one-time impairments on generation assets in previous years.

Repower Group posted earnings before interest and taxes (EBIT), before exceptional items, of CHF 12 million, CHF 27 million (69%) lower than the CHF 39 million in EBIT before exceptional items recorded the previous year.

Financial results and the share of results of associates item deteriorated by CHF 27 million year on year, with a loss of CHF 75 million versus a loss of CHF 48 million the previous year. The main reasons for this were exchange rate losses amounting to CHF 34 million, losses on currency forwards and forward rate agreements (hedges) amounting to CHF 22 million. This was offset by positive effects totalling around CHF 8 million in the form of profits from the disposal of financial assets (of which CHF 7 million came from the sale of Swissgrid interests).

Group result came in at negative CHF 46 million (previous year: negative CHF 22 million).

Cash flow from operating activities declined 83 per cent year on year to CHF 17 million, in direct correlation with the downward trend in energy trading prices.

Information on balance sheet

There was an CHF 119 million year-on-year decline in non-current assets to CHF 869 million (previous year: CHF 988 million), due primarily to impairment charges on generation assets (CHF 62 million) and at associates (CHF 9 million), and the removal of the floor on the EUR/CHF exchange rate in mid-January (CHF 27 million).

There was a CHF 127 million year-on-year decline in current assets to CHF 949 million (prior year CHF 1,076 million). This was primarily related to the items receivables (CHF -101 million), securities and other financial instruments (CHF -141 million) and positive replacement values (CHF -29 million); this was offset by a CHF 150 million increase in cash and cash equivalents.

Non-current liabilities declined by CHF 130 million. This was due in particular to the item non-current financial liabilities (CHF -200 million resulting from the reclassification of a bond to current financial liabilities; a CHF 38 million increase relating to a registered bond issue; a CHF 35 million increase related to loans from companies not controlled by Repower).

The balance sheet total declined 14 per cent to CHF 1,828 million (previous year: CHF 2,126 million), while equity at the end of 2015 went down to CHF 600 million (previous year: CHF 766 million).