EnBW Financial Results Q1 2021: Earnings Decrease “Temporarily”

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German electric utility company EnBW Energie Baden-Wuerttemberg AG (ETR:EBK), headquartered in Karlsruhe, yesterday released the financial results of the first quarter of 2021. The company said that due to temporary effects, it reported slightly lower first-quarter earnings in 2021 than in the previous year. This is expected to even out over the course of the year and the full-year earnings guidance for 2021 remains unaltered.

The company stated that its revenue for Q1 2021 was €6.83 billion (previous year: €5.58 billion) and its operating result (adjusted EBITDA) was €814.1 million, a decrease of 13.8% on the same period a year earlier (€944.8 million). The lower earnings are mainly due to various temporary measurement effects and also on account of generally poorer wind conditions than in the first quarter of the previous year. It is important to note that the full-year earnings guidance for 2021 remains unaltered. Adjusted EBITDA for the 2021 financial year is expected to be in a range between €2.825 billion and €2.975 billion, which is 2% to 7% above the previous year. The firm claimed that the corona pandemic had no significant impact on the operating business in the first three months of 2021.

CFO Thomas Kusterer said, “We continue to expect slight earnings growth this year. Our integrated portfolio approach means that we now have a highly robust business model. That is also confirmed by the capital market. Just this February, we successfully completed two bond issues for a total of €1 billion.” Kusterer went on to note that the sustainable growth-oriented strategy is already underpinned with confirmed new projects. He said that in renewables, for example, the firm has substantially expanded investment with its success in partnership with bp in the seabed area auction for the construction of two offshore wind farms in Great Britain. He believes that the company is making good progress in new business areas such as electric mobility and broadband rollout.

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According to the firm, net profit attributable to the shareholders of EnBW AG increased sharply from €-10.4 million in the previous year’s period to €321.1 million in the first quarter of 2021. Earnings per share were consequently €1.19, versus €-0.04 a year earlier. The rise in Group net profit is primarily due to the significantly improved financial result. This reflects a higher valuation of securities portfolios. Net debt decreased by around 14% compared with the previous year’s period due to the higher discount rate on pension provisions and to payments received under the German Renewable Energy Sources Act.

Adjusted EBITDA in the Sustainable Generation Infrastructure segment (Renewable Energies and Thermal Generation and Trading) marked a 24.9% decrease on the same period a year earlier. In renewable energies, adjusted EBITDA fell by 12.2% to €207.3 million. The decrease was mainly due to poor spring wind conditions this year at offshore and onshore wind farms.

The EnBW Group’s investment, at €572.2 million in the first quarter of 2021, was significantly higher than in the same period of the previous year (€300.4 million). This mainly relates to bidding success in the seabed area auction for the construction of offshore wind farms in Great Britain. Some 78.1% of total investment was for growth projects such as the expansion of renewables and the rollout of charging infrastructure for electric vehicles.

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