VERBUND results for quarters 1-3/2004

The positive business trend at VERBUND continued in quarters 1-3/2004 and the results and control-specific group ratios developed quite impressively. This success is attributable to the strategy which the group has implemented consequently over the last few years: VERBUND has been almost entirely restructured, focuses primarily on its core business, has set its capital structure on a solid basis and has largely diversified its marketing channels in Europe. In addition, the current market environment in the European electricity sector, which is marked by increasing wholesale prices, is quite favourable for VERBUND. The Group aims at achieving profitable company growth through value-creating investments and acquisitions in defined core markets within Europe.

The utilization of the increasing European wholesale prices for electricity in indexed contracts paved the way for a clear increase in sales revenue of 21.9% to € 2,202.6 million. Here, top priority was given to enhancing profits as opposed to enhancing volumes in the core markets Austria, Germany, France, Slovenia and Italy.

The operating result displayed a double-digit growth of 21.3% to € 284.0 million and the ongoing debt-clearing program coupled with a clear increase in investment income paved the way for a 7.8 % rise in profit before taxes on incometo € 264.9 million. Tax effects from the Tax Reform 2005 led to a 25.7% improvement in profit after taxes on income to € 210.4 million and the group result also increased significantly by 22.7% to € 191.3 million. At the end of the nine-month period, the earnings per share had already risen to € 6.21/share and had therefore almost reached the level recorded at the end of the previous year.

Net gearing was reduced from 172.7% to 139.1% on account of the continued debt-clearing policy. The operating cash flow of the group rose significantly by 13.7% to € 388.2 million, a clear indication that the financial power of the company has improved significantly.

The price of the VERBUND share continued its positive development and generated a plus of 51.6 % since the beginning of the year. Consequently, the share clearly outperformed the DJ STOXX Utilities (+18.5%) and the ATX (+32.2%) The VERBUND share was therefore among those stocks that achieved the highest value increase of all the listed utility stocks.

The forecast for the full year 2004 remains positive. Against the backdrop of the current market environment, the operating result and the group result are expected to lie approx. 20% above the corresponding values the previous year. We also anticipate a significant value generation resulting from an increase in economic value added and that the debt-clearing programme can be continued.

Detailed information on the results for quarters 1-3/2004 can be found under http://www.verbund.at/. Here, you can either download the Interim Report or view the user-friendly online version.