The time has truly come for the Netherlands to develop new energy and export sources such as solar, wind and bio energy. These innovations are important for our country and the coordinating role of the government in this respect is essential. It will enable the Netherlands to take the lead in a new international growth sector to strengthen our economy, create jobs and increase our independence. The opposite is threatening to happen. Production of electricity from polluting coal doubles and the own generation of clean energy by consumers is not being stimulated because behind-the-meter settlement is not allways possible, which means that the customer is not entitled to a tax benefit. The CO2 market is still not functioning properly. It is time to turn the tide. Sustainable energy is the solution for a future-proof energy supply. Eneco has a strong connection with its customers and with society and has made substantial investments in sustainable energy in recent times. Our aim is to continue to ensure that our customers can count on affordable, reliable and clean energy, now and in the future. In the future, energy will not only be sustainable, it will also be generated mainly from decentralised locations. Customers will generate their own energy, for their own use and for others.
Eneco presents interim financial statements
Political plea to let The Netherlands take the lead in sustainable energy
- Net profit up by 32% in the first half of 2012, including the one-off gain from the sale of the interest in KEMA
- Operating profit down by 7% to € 208 million
- € 309 million invested in sustainable production and networks
Eneco has called political parties to take the following three steps to make the energy supply in the Netherlands clean, reliable and affordable:
- creating strong Dutch energy companies that invest in their customers by generating and saving energy together;
- applying the polluter pays principle to stimulate the generation of clean energy in the Netherlands;
- letting consumers, farmers and companies generate their own energy.
Eneco's investments in the first half of 2012 amounted to € 309 million and mainly related to new sustainable production capacity and the renovation and maintenance of the energy networks. Eneco expects to continue this high level of investment during the rest of the year to realise its mission 'Sustainable energy for everyone'. The energy world is going through a transition towards decentralised and sustainable generation and Eneco is responding to this change by collaborating with its customers and partners. Eneco is helping them to save energy, to generate their own energy and to purchase energy as efficiently as possible.
Financial results for the first half of 2012
Net profit
The Eneco Group realised a net profit of € 175 million for the first half of 2012, which represents an increase of € 42 million (32%) compared with the first half of 2011. Adjusted for the one-off gain in connection with the sale of the participation in KEMA (€ 56 million), the net profit in the first half of 2012 shows a decrease of € 14 million (-11%).
Gross margin
Total revenues in the first half of 2012 amounted to € 2,810 million. This is an increase of € 328 million (13%) compared with the first half of 2011. The gross margin and other revenues rose by € 101 million to € 889 million. The transmission rates and the increase in the sale and production of
energy were the most important factors in this increase.
Our operating expenses have also increased as a result of the expansion of our activities: from € 563 million to € 681 million. Amortisation and depreciation charges, an important cost component, increased by € 37 million because we have taken new production capacity into use. The acquisition of Oxxio also led to an increase in the operating expenses. As a result of the economic crisis, Eneco is also being confronted with a higher number of doubtful debts and bankruptcy among its customers than usual.
Operating result
The consolidated operating profit amounted to € 208 million, a 7% decrease compared to the first half of 2011 (€ 225 million).
The newly operational production facilities had a positive influence on the production, trading and supply activities, but movements in market prices were, in general, unfavourable. The spark spread on the electricity production (i.e. the difference between the purchasing costs of gas and the sales revenue from the electricity produced with this gas) decreased, CO2 prices and the prices of green certificates were lower and the supply of Liquefied Natural Gas (LNG) was limited. In this climate, we still managed to realise a good performance with an operating profit of € 68 million (2011: € 92 million).
The operating profit of the network, advice and engineering activities improved by € 20 million to
€ 163 million, in part owing to the transmission rates and lower network losses. There was a decrease in the order intake and capacity utilisation rate at infrastructural operations.
The Eneco Group is working on an active programme consisting of margin improvements on the other hand and cost reductions on the other hand to improve the future profitability of the group.
Participations
The result from participations in the first half of 2012 amounted to € 59 million (2011: € 2 million). On 28 February 2012, we sold our 31% interest in KEMA to Det Norske Veritas Holding AS. This transaction resulted in a book profit and the receipt of a one-off dividend, totalling € 56 million. Eneco was the largest shareholder in KEMA.
Investments
Eneco is working on realising its sustainable ambitions by building up a diversified sustainable assets portfolio. Eneco Holding N.V. invested € 309 million in the first half of 2012. € 158 million was invested in the renovation and expansion of gas and electricity networks. The energy company invested mainly in the development of the wood waste fired biomass power plant Golden Raand in the city of Delfzijl (€ 42 million) and in wind farms in the Netherlands, Belgium and the United Kingdom (€ 52 million).
Solvency
Interest-bearing debt amounted to € 2,070 million at the end of June 2012 compared with € 2,069 million a year earlier. Solvency at the end of June 2012 amounted to 51.4%, practically unchanged compared with the position at 31 December 2011 (50.4%) and at 30 June 2011 (51.0%).
Outlook for 2012
Although there is wide-spread confidence in the developments of the company, we will refrain from making a statement with regard to our expectations for the results for the full year 2012 in view of substantial external uncertainties.