Consolidated Financial Statements of the Repower Group

Comments on the consolidated financial statements



In 2019 Repower was able to significantly exceed both the prior year’s results and expectations for 2019. After a decline in the first quarter there was very high volatility in prices on the energy market, but no clear trend. As in the previous year, Repower managed to profitably exploit its long position in this market environment. At the same time it could capitalise on volatile energy market prices and the accompanying market opportunities in speculative trading. Also worthy of mention are the continued stability and support provided by earnings from energy supply and another increase in revenues from contracts for third parties. In Italy Repower was able to increase the volumes of electricity and gas sold as budgeted and thus achieve its financial targets. There was an extremely substantial contribution to earnings from marketing energy from the Teverola combined-cycle gas turbine plant on the day ahead market and, in particular, on the balancing energy market. Once again the earnings from this business were significantly better than anticipated. In its first complete year of operation, Repower Renewable in Italy contributed a gratifying result, even if it was slightly below expectations because of the delayed commissioning of a wind farm.

The 2019 financial year ended with earnings before interest and tax (EBIT) of CHF 65 million. Income before income taxes came to CHF 54 million, with annual profit for the year CHF 50 million. Annual profit without minority interests came to CHF 46 million.

The comments on Repower Group’s 2019 financial results below, including the prior-year comparisons, refer entirely to the results stated under Swiss GAAP FER.

At CHF 1,915 million, Repower Group net sales from goods and services were up 8 per cent year on year (prior year: CHF 2,074 million). The main reasons for this were a slight decline in energy trading turnover in both Switzerland and Italy. Sales revenues in Italy were up around 4.6 per cent in local currency. However, the fact that the average euro exchange rate was around 4 per cent lower than the previous year neutralised this effect in Swiss francs, the reporting currency. Gross energy margin improved markedly, up CHF 41 million from CHF 223 million to CHF 264 million. Major factors in this were the gratifying results from energy trading in Switzerland mentioned above and the very efficient deployment of the Teverola power plant on the balancing energy market in response to market demand. Contributions to the CHF 41 million increase break down as follows: Switzerland CHF +16 million, and Italy CHF +25 million.

Operating expenses (without energy procurement) declined by around CHF 25 million year on year to CHF 202 million (from CHF 178 million the year before). An increase in the cost of materials and third-party services (up CHF 17 million) was primarily attributable in Switzerland to expansion in work for third parties and the development of new products. In Italy this increase was due to higher costs at Repower Renewable (which saw its first complete year of operation) and an increase in compensation paid to the sales network. An increase in personnel expense (up CHF 3 million) is related to a one-off deposit by Repower to the pension fund to compensate for the reduction in the conversion rate in Switzerland. An overall increase in operating expenses (up CHF 3 million) was due to expenses in connection with the development of new products, the refinement of IT systems, and efforts to grow sales in Italy. A substantial year-on-year increase in energy generated resulted in higher concession charges (up CHF 1 million).

Scheduled depreciation/amortisation came in at CHF 52 million for 2019, up CHF +6 million on the previous year. This increase is due primarily to Repower Renewable’s renewable generation assets in Italy combined with the fact that this was the company’s first full year of operation. Unlike the previous year, only a slight impairment charge (CHF –1 million) was taken in the year under review.

There was a year-on-year improvement in financial results, with a loss of CHF 12 million versus a loss of CHF 16 million the previous year. The growing strength of the franc led to a slight year-on-year increase in currency losses, up CHF 1 million to CHF 10 million. However, thanks to hedging transactions it was possible to substantially neutralise this effect. The year under review saw an increase in interest on financial liabilities from CHF 9 million in 2018 to CHF 11 million in 2019 because of Repower Renewable. There was a positive effect of around CHF 4 million resulting from the remeasurement of the recoverability of a financial investment.

Repower Group posted earnings before interest and taxes (EBIT) of CHF 65 million, around 84 per cent higher than the CHF 35 million recorded the previous year. Another very positive development was a substantial increase in funds from operations (FFO), up to CHF 103 million from CHF 60 million the previous year. FFO is an important additional performance indicator for Repower alongside cash flow from operating activities, representing cash flow before change in net current assets and taxes paid.

Repower posted group earnings of CHF 50 million for 2019 (prior year: CHF 16 million). This significant year-on-year increase is very gratifying, and was due to improvements in various key earnings components in both Switzerland and Italy.

After an increase the previous year resulting from the acquisition of renewable generation assets in Italy, there was a decline in tangible assets (down CHF 28 million) without any notable additions or disposals. A year-on-year decline in inventories (down CHF 24 million) was the result of the winding down of gas inventories. Finally, net investment in short-term investments resulted in an increase in securities (up CHF 44 million).


Over the year under review Repower was able to exploit a number of market developments to its benefit to achieve gratifying results. In addition to the regulatory aspects of the energy transition, the current financial year will be dominated by two challenges: the development of energy trading prices, which are currently very low, and the impact of the coronavirus on the real economy. COVID-19 will exacerbate what were already challenging market conditions, and uncertainty around the political and market framework will remain. The environment for the energy industry cannot be expected to become much more stable in the coming year. Energy prices will remain highly volatile. The economic impact of the coronavirus in Switzerland, and even more so in Italy, is difficult to predict. Repower will benefit from the balance sheet built up over recent years, a strong equity ratio and high levels of liquidity.

Basically the company can still anticipate growth. But given that energy prices are at such low levels and that the economic implications of the coronavirus crisis cannot yet be assessed, Repower does not expect its 2020 business performance to match the prior year results.