Verbund 2Q 20 - Low hydro levels take their toll, outpace higher prices
Verbund's 2Q EBITDA came in bang in line with our forecast and met consensus expectations, as it suffered from low hydro levels and weak spot prices. Higher earnings from flexibility products and grid results deteriorating at a slower pace lent support to earnings and the FY guidance. Surprisingly, given strong spark spreads, Verbund impaired Mellach CCGT (EUR 5.6 mn), as well as the Gries run-of-river power plant (EUR 5.6 mn) and the rights to purchase electricity from the Graz power plant on the Mur River (EUR 3.2 mn) on the rising cost of capital. The financial results recorded net positive one-offs of EUR 25 mn (Jochenstein power plant EUR +26.1 mn, Ashta power plant EUR -1 mn), causing a small outperformance on the bottom line.Verbund is a public utility company engaged in the generation and transmission of electricity from subsidiaries' hydro and thermal power stations located throughout Austria. Through its subsidiaries, Co. is involved in the planning and construction of water systems, hydroelectric power plants, river structures, sewage disposal systems, and high voltage transmission towers and lines. Co. generates, trades and sells electrical energy to power exchange buyers, traders, energy supply companies and industrial companies as well as households and commercial customers.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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