VERBUND AG (OEZVF) Q4 2024 Earnings Call Transcript

2025-03-26 12:37:04 ET

VERBUND AG (OEZVF)

Q4 2024 Earnings Conference Call

March 20, 2025 06:00 AM ET

Company Participants

Peter Kollmann - Chief Financial Officer

Andreas Wollein - Head of Group Finance and Investor Relations

Conference Call Participants

Wanda Serwinowska - UBS Group AG

Harrison Williams - Morgan Stanley

Olly Jeffery - Deutsche Bank

Piotr Dzieciolowski - Citigroup Inc.

Thibault Dujardin - Bernstein SG Group

Alberto de Antonio - Exane BNP Paribas

Presentation

Operator

Ladies and gentlemen, welcome to the VERBUND AG Full Year 2024 Conference Call. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Peter Kollmann. Please go ahead.

Peter Kollmann

Thank you very much. I'm here with Andreas Wollein, Head of Investor Relations and Finance. We will do this presentation together. Ladies and gentlemen, welcome to the presentation of our 2024 results, and let me thank you for joining today's conference call.

Before we move into the analysis of our business development, let me make a few general comments. In '24, the VERBUND results were down compared to '23, but still high in a historic context due to normalizing conditions in the energy industry following the gas price shock after the outbreak of the Russia-Ukraine conflict.

As you know, the past financial years proved to be challenging for the entire energy industry with very little predictability and high volatility, in particular, geopolitical events, but also the weakening economy in Europe. In addition, the landmark actions in the EU in many EU member states and of course, in the U.S. gave rise to intensive discussions about the future shape of the regulatory and political framework conditions within the energy sector. These developments made it very clear that tensions between security of supply, climate protection and competitiveness will remain intense over the next years.

Now let's move on to the details of our '24 results. Average achieved contract prices decreased compared to '23. The hydro coefficient determining the generation from our run-of-river hydropower plants was significantly better compared to last year, the generation from the annual storage power plants rose due to higher inflow and reduced reservoir levels outweighing the lower generation from turbining. generation from wind and PV was also up. The increase in new renewables was mainly a result of the commissioning of new renewable power plants in Spain, but also in Austria and Germany.

However, the overall result contribution declined due to lower achieved prices, higher other operating expenses and valuation effects of energy derivatives. Generation from thermal power also rose due to the increased use of our CCGT in Mellach. The results contribution from the sales segment improved and was slightly positive. However, the contribution from retail was still negative. Lower contributions from Gas Connect Austria and Austrian Power Grid were recorded in the regulated Grid segments. And finally, contribution from flexibility products decreased mainly due to lower contributions from concession management.

Now let me go into more details, and let me start with the hedging volumes. Higher relevant, highly relevant for VERBUND results -- as you know, €1 per megawatt hour, plus or minus, has a sensitivity of approximately €25 million in our EBITDA line. As of the 21st December '24, we reached an average achieved contract price for hydro generation of €118, dramatically below '23. As of the 31 December '24, we have sold 66% of our own generation volumes for '25 at a price of €117.5 million. And for '26, we have sold 38% of the generation volumes at a price of €79.3....

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