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Repower posts increase in operating profit
2019 semi-annual report(PresseBox) ( Poschiavo, )
In the first six months of 2019, Repower was able to systematically exploit improved conditions in the electricity market. Thanks to optimum management of its energy positions, excellent trading results and persistent cost management, the company’s results exceeded expectations.
Total operating revenues for the first half of 2019 came in at CHF 1,018 million (down 3.3% on the first half of 2018). Operating income of CHF 56 million was well above the prior year’s figure of CHF 9 million. The Market Switzerland segment contributed EBIT of CHF 20 million in the first half of 2019 (versus CHF 5.5 million in the first half of 2018), and Market Italy generated EBIT of CHF 40.1 million (versus CHF 6.8 million the prior year). The Corporate Centre’s EBIT contribution was CHF -4.1 million. Net profit for the first six months came to CHF 49 million. The equity ratio improved from 43% to 47%. Operating income from both the Market Switzerland and Market Italy segments was higher than expected.
Good market environment for balancing energy
The market environment remains challenging, but also offers opportunities for Repower. In the first half of 2019 the rising price of CO2 certificates contributed to a positive trend in electricity prices. Because of fluctuations in their production, new renewables also had a major impact on the market. Repower was able to profit from this by providing balancing energy. This was particularly the case in Italy, where the Teverola combined cycle gas turbine plant is deployed to maintain grid stability. Low commodity prices further boosted Teverola’s performance. Thanks to good weather conditions for wind and solar power, production figures for Italian subsidiary Repower Renewable were better than budgeted.
The trading business in Switzerland likewise developed well in the first half of the year, as did contracts for third parties. Repower’s own assets in Switzerland generated a total of 339 GWh in the first six months, slightly above the ten-year average.
Great response to SMARTPOWER
A major milestone in the first six months was the start of the rollout of smart metering product SMARTPOWER. Four energy utilities have already decided to deploy Repower’s innovative system in their supply areas.
In May, voters in Poschiavo and Brusio approved changes to the concessions, paving the way for further planning of a total renovation of Robbia power plant and the installations in Miralago. This major project would assure the generation of hydroelectric power in the Valposchiavo for decades to come.
In Italy the number of customers served by Repower’s sales business continues to grow. The acquisition deals launched by Repower back in autumn 2018 continued to run successfully in the first half of 2019.
Market conditions remain challenging for the energy industry. While the trend to higher electricity prices continues, the uncertain development of the EUR/CHF exchange rates is putting serious pressure on margins. As a rule, Repower's result in the first half of the year is better than in the second half. In 2019, an annual result above that of the previous year is expected.
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