Consolidated Financial Statements of the Repower Group

Comments on the financial results

Repower defies difficult energy market and records solid EBIT of CHF 82 million.

The prior year Repower had experienced rising prices and a high level of energy market volatility. In 2022 there was again a significant year-on-year increase in the level of prices. This was reflected, for example, in the average German base electricity price on the EPEX Spot exchange, which increased from EUR 31 per MWh in 2020 to EUR 97 per MWh in 2021 and EUR 235 per MWh in 2022.

In the year under review, electricity prices increased dramatically, mainly owing to huge increases in gas prices. This price shock began in June 2022 and was triggered by the war in Ukraine and a shortage of gas. Prices moderated again towards the end of the year, but the situation on the energy market remains tense and volatile.

Repower’s earnings before interest and taxes (EBIT) came in at CHF 82 million, the same as the prior year. This is a solid figure and shows that Repower is well positioned, operating sustainably and generating earnings. Group profit was more or less unchanged at CHF 46 million (prior year: CHF 47 million). Earnings per share came to CHF 5.52 (prior year: CHF 5.72). In 2022 Repower managed to some extent to reduce the high balance sheet total of the prior year, which had been the result of the development of the market. Total assets fell significantly from CHF 3,982 million to CHF 3,025 million. This was accompanied by a recovery in the equity ratio from 22 per cent at the end of 2021 to 29 per cent at the balance sheet date.

Repower’s 2022 income statement contains a number of extraordinary items which impacted both gross energy margin and earnings before interest and taxes (EBIT).

Development in sales, and strong operating results

At CHF 4,718 million, Repower Group net sales from goods and services were up 47 per cent on the prior year level of CHF 3,211 million. The significant increase in net sales is related in particular to the rise in electricity and gas prices versus the prior year mentioned at the beginning of this section of the report.

Gross energy margin, which Repower defines as the difference between net revenue from energy business and energy procurement, increased by CHF 11 million from CHF 274 million to CHF 285 million at group level, although the trends in the two operational segments, Market Switzerland and Market Italy, went in opposite directions.

In the Market Switzerland segment gross energy margin, including a positive extraordinary item of CHF 18 million (prior year CHF 5 million) on the basis of an adjustment of provisions for onerous energy procurement contracts, increased by CHF 57 million from CHF 112 million to CHF 169 million.

Despite a decline in its own production versus the prior year, Repower was able to profit from the higher level of prices, thanks in particular to its trading activities within the Market Switzerland segment. The reasons for the reduction in own production included the scheduled shutdown of Robbia power plant for the purposes of total modernisation, a major shortfall in precipitation, and the fact that Repower retained volumes of water for the Swiss federal government’s hydropower reserve to keep energy production of 24 GWh on standby until May 2023. Even before extraordinary items, the increase amounted to an impressive CHF 44 million.

In 2021 the purchase price adjustment made for the transfer of transmission grids and the receipt of a premium for large hydropower projects amounting to CHF 21 million and CHF 4 million respectively were recognised as extraordinary items under other operating income.

EBIT for the Market Switzerland segment came to CHF 71 million, almost double the prior-year figure of CHF 37 million. EBIT adjusted for extraordinary items increased by CHF 46 million from CHF 7 million to CHF 53 million.

Sales of electricity from the Market Switzerland segment to the Market Italy segment saw a year-on-year increase of CHF 367 million from CHF 52 million to CHF 419 million.

In the Market Italy segment the gross energy margin declined by CHF 54 million, down from CHF 162 million to CHF 108 million. This was due to a decline in the margin on the provision of balancing energy produced by Teverola combined cycle gas turbine plant (down CHF 37 million) versus the prior year, as well as lower margins on the retail business (down CHF 16 million).

In 2022 Repower received CHF 12 million in insurance payments related to downtime at the Teverola plant in 2020 and recognised as other operating income. The share of CHF 5 million directly attributable to the minority shareholder – who has an interest in the power plant – is also recognised as other operating expenses in the Market Italy segment.

The Market Italy segment contains impairments of CHF 16 million (previous year CHF 5 million) on receivables recognised as other operating expenses, which relate to retail customers in the sales business. The increase is connected in particular to the high absolute values of open positions, due to higher prices.

The current year includes positive extraordinary items relating to a change in provisions for excise taxes and other contractual risks in the amount of CHF 3 million (prior year: expense of CHF 4 million) as well as a reversal of an impairment loss on a property in the amount of CHF 4 million.

EBIT in the Market Italy segment declined CHF 45 million from CHF 57 million to CHF 12 million. EBIT adjusted for extraordinary items even declined from CHF 61 million to CHF –2 million.

In 2022, the Market Italy segment increasingly relied on intra-group electricity procurement via the Market Switzerland segment.

EBIT in the Other segments and activities segment came to CHF –1 million (prior year: CHF –12 million).

The Other segments and activities segment includes a positive CHF 8 million effect from the consolidation of income and expense. This is an offsetting difference between the Market Switzerland and Market Italy segments resulting from currency translation.

This difference is due to the fact that the income statement of the Market Italy segment is translated at an average exchange rate that differs from the transaction or daily exchange rates that are used to record the corresponding income and expenses in the Market Switzerland segment. Energy sales invoiced in euros from the Market Switzerland segment to the Market Italy segment increased sharply in 2022 as the euro weakened. In Swiss francs, the procurement costs of the Market Italy segment, which are translated into Swiss francs at the average annual exchange rate, turned out to be higher than the net revenue of the Market Switzerland segment, which was translated into Swiss francs at the transaction or respective daily exchange rate. The expense overhang of CHF 8 million in the energy gross margin that arose when combining the expenses and income of the Market Switzerland and Market Italy segments was reclassified in the Other segments and activities segment to the effect of currency translation recognised under changes in consolidated equity.

Without the difference of the elimination of expenses and income and their recognition as the effect of currency translation in changes in consolidated equity, the EBIT of the Other segments and activities segment amounts to CHF 9 million (prior year: CHF 12 million); the prior year was negatively impacted by the CHF 4 million negative earnings of the associated company EVUlution AG.

Similar to the prior year, the year under review also saw negative financial earnings of CHF 17 million, the result of the interaction of financial income and expenses. Once again Repower managed to counter development in the euro exchange rate with the help of hedging transactions, and to offset major currency losses.

Earnings before tax came in at CHF 65 million, in line with the prior year. Income taxes increased only slightly from CHF 18 million to CHF 19 million.

Asset situation

Compared with the prior year, total assets fell 24 per cent or CHF 957 million from CHF 3,982 million to CHF 3,025 million, owing in particular to a decline in current assets and current liabilities.

Repower’s non-current assets declined by CHF 27 million from CHF 1,007 million to CHF 980 million. Significant changes were a reduction in fixed-term deposits to create additional liquidity (CHF 31 million), a decline in deferred tax assets (CHF –9 million) and the acquisition of the two associated companies Erreci S.r.l. and Erreci Impianti S.r.l. (CHF +7 million). These two companies are predominantly involved in developing solar installations, from procuring the requisite materials and services to building the installation itself, and in reselling energy.

Current assets declined 31 per cent or CHF 930 million from CHF 2,975 million to CHF 2,045 million. The main factors driving total assets were positive replacement values of held-for-trading positions amounting to CHF 990 million (prior year: CHF 1,775 million), but also negative replacement values of held-for-trading positions amounting to CHF 939 million (prior year: CHF 1,772 million). The appropriate selection of trading partners and the resulting option of netting positive and negative replacement values helped limit or reduce the amount of these positions. In net terms, replacement values of held-for-trading positions increased from CHF 3 million to CHF 51 million.

Despite negative translation differences of CHF –19 million and a dividend distribution of CHF –34 million, equity fell by only 1 per cent from CHF 883 million to CHF 876 million. This is due to the positive group profit of CHF 46 million. The equity ratio is 29 per cent (prior year: 22 per cent). Return on equity (group earnings divided by equity) was 5 per cent, in line with the prior year.

Liabilities came to CHF 2,149 million at 31 December 2022, down 31 per cent or CHF 949 million from CHF 3,098 million the prior year. Here too the main reason is the extraordinarily pronounced decline in the replacement values of held for trading positions. Negative replacement values of held for trading positions declined by CHF 833 million from CHF 1,772 million to CHF 939 million.

Cash flow from operating activities

Cash flow from operating activities in 2022 is largely characterised by the negative effects of a change in net working capital of CHF –232 million (prior year: CHF +18 million) and amounts to CHF –145 million (prior year: CHF +119 million). The current high level of energy prices and price volatility mean high liquidity requirements for Repower’s trading activities. For example, the security deposit of CHF 84 million received and classified as a liability from direct trading in the previous year alone, which was provided by a trading partner, had to be repaid in 2022. In net terms, payment outflows related to margins in energy trading came to CHF –107 million. The share of unrealised gains and non-cash gains from trading activities recognised in the change in replacement values of held for trading positions in the cash flow statement is also CHF 54 million higher than the prior year and currently amounts to CHF –48 million.

Cash flow from investing activities was up CHF 86 million to CHF +49 million (prior year: CHF –37 million). Direct investments in tangible and intangible assets, mainly related to power generation and grid assets, saw a year-on-year decline of CHF 15 million to CHF 89 million (prior year: CHF 104 million); the prior year figure includes an outgoing payment of CHF 24 million for reversion waiver compensation payments. Given the high levels of liquidity currently required for energy trading, there were net divestments of CHF 112 million (prior year CHF 44 million) of current and non-current financial assets. Furthermore, cash flow from investing activities was boosted in 2022 by the final payment of CHF 10 million for the sale of Repower Transportnetz AG to Swissgrid AG that took place back in 2013.

In 2022 cash flow from operating activities was less than cash flow from investing activities (having exceeded cash flow from investing activities the prior year), amounting to CHF –96 million (prior year: CHF 83 million). Adjusted for incoming and outgoing payments in connection with investments and divestments of fully consolidated companies and associates, free cash flow came to CHF –101 million (versus CHF 73 million the prior year).

Cash flow from financing activities came to CHF +10 million (prior year: CHF –4 million). Overall in 2022, financial liabilities of a net CHF 54 million were taken up (prior year: CHF 28 million). The Repower bond maturing in 2022 was repaid at its nominal value of CHF 96 million. In December 2022, a two-year bond with a nominal value of CHF 150 million was issued for CHF 150 million. In 2022 Repower paid dividends of around CHF 34 million to shareholders (prior year: CHF 23 million). Repower’s cash and cash equivalents amount to CHF 283 million (prior year CHF 370 million).

The figure for net debt or net liquidity is calculated on the basis of cash and cash equivalents, marketable securities, fixed-term deposits, and current and non-current financial liabilities, including accrued interest. Net liquidity is indicated by a minus sign. The main factor with a negative impact on the 2022 figure for net debt was the repayment of deposits in connection with energy trading transactions. Compared with the prior year, in which there was net liquidity of CHF –97 million, in the year under review net debt came to CHF 152 million. Nevertheless, the net debt to EBITDA ratio remains low at 1.1 (–0.7 the prior year), giving Repower greater financial and strategic room for manoeuvre.

Dividend to shareholders

Given Repower’s good operating results, strong capital structure and healthy liquidity, the board of directors moves that the annual general meeting of 17 May 2023 approve a dividend of CHF 5.00 per share.


The prolonged conflict between Russia and Ukraine and the resulting economic sanctions imposed by Western countries are having a significant impact on the market environment and continue to influence developments. This is leading to persistently high volatility on the energy markets and is increasing the risk that trading partners will get into economic difficulties. Government intervention in the energy market, for example through electricity price regulation or the skimming of excess profits, is growing. On the other hand, society is increasingly demanding renewable energy and even new fields of business such as the stockpiling of hydropower reserves. Important trends continue to be the advancing digitalisation and automation of energy supply systems as well as the increasing electrification of road traffic, which requires the development of a corresponding charging infrastructure.

Repower is keeping a close eye on developments and is taking steps to seize opportunities and minimise risks on an ongoing basis. Considering the challenges it faces, the company has solid finances and is focused on sustainability to continue to be successful in the future.

Repower anticipates higher earnings before interest and taxes (EBIT) in 2023 than in the year under review. However, the market remains challenging Negative developments such as the absence of rainfall or renewed market disruptions would be a major challenge.

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