Turnover up, profit down compared to first half 2008
Highlights
Turnover increases in first half of 2009 by 9% to EUR 2,985 million (H1/2008: EUR 2,727 million);
Gross margin decreases 13% to EUR 895 million, principally due to lower trading margin and other fair value movements (H1/2008: EUR 1,027 million);
Net profit lower than in first half of 2008: EUR 226 million (H1/2008: EUR 497 million);
Customer numbers in the Netherlands and Belgium still rising gradually.
Sep 25, 2009 | Amsterdam Nuon achieves first half 2009 profit of EUR 226 million
Nuon’s turnover increased by 9% in the first half year. Net profit, however, decreased compared to the first half of 2008. The higher turnover can be chiefly explained by the acquired gas production activities. New customers also contributed to the higher turnover. Lower trading results and other fair value movements, relatively higher contracted purchasing prices and a decreased margin on production resulted in a lower gross margin. These effects, in combination with higher operating expenses, led to a net profit of EUR 226 million (H1/2008: EUR 497 million).
Commenting on the results Øystein Løseth, Chairman of the Management Board, said:
“This first half year showed a good result. Despite intensified competition we again managed to win customers in the Netherlands and Belgium and are experiencing the positive results of our gas production activities, which we expanded further in June. With a profit of EUR 226 million we were unable to equal the exceptionally high financial result of the comparative period last year. This is due to the less favourable market conditions compared with the first half year of 2008, higher costs relating to strategic processes such as the unbundling and a lower margin on our production. In strategic terms, this half year centred on the joining with Vattenfall, a gratifying step that was formally concluded on 1 July.”
Nuon supplied 3% more electricity to Dutch customers compared to the first half of last year. The volume of gas supplied in this segment increased by about 6%, mainly thanks to new business customers. The total volume of gas that Nuon supplied increased by 11%, mainly due to Nuon’s participation in gas fields since June last year. In Belgium the number of customers increased by 25,000 (electricity) and 10,000 (gas) compared with the same period last year.
Net turnover increased by 9% to EUR 2,985 million (H1/2008: EUR 2,727 million). This is mainly due to the gas production activities that we acquired in mid-2008 as well as newly acquired customers and the higher volumes supplied. Higher prices for gas and electricity played a role too. On 1 July the variable rates in the Dutch consumer market were reduced by about 36% for gas and 4.5% for electricity. The lower prices stem from decreased raw material prices, the effects of which are not immediately felt.
The gross margin came to EUR 895 million (H1/2008: EUR 1,027 million) and was thus 13% lower than in the comparable period last year. The high figures for trading results and other fair value results of last year could not be equalled in 2009. This effect was partly offset by the positive results of our gas production activities and the increased sale of gas and electricity to consumers and business customers. Higher contracted purchasing prices and a lower production once again had a negative effect on the gross margin. The gross margin on heating and other activities decreased due to the estimated negative effect of the recently adopted Heat Distribution Act.
The operating expenses during the first six months increased by 17% compared to the first half of 2008. This is related to the unbundling costs, the holding company costs paid to n.v. Nuon and higher personnel expenses. The higher level of activity and the strategic partner programme also contributed to the cost increase in the past half year.
The lower gross margin and higher costs led to a decrease in the profit after taxation to EUR 226 million (H1/2008: EUR 497 million).
Operating cash flow and net cash position
The net cash position as at 30 June 2009 increased to EUR 897 million (30 June 2008: EUR 367 million). This is mainly due to the settlement of outstanding current account balances with our former parent company and the delay in investments in the Nuon Magnum multi-fuel power station in the first six months of 2009. The cash flow from operating activities increased, notably because of the settlement of the aforementioned current account credit balances, to EUR 1,467 million. In the first half of 2009 the investments (EUR 241 million) were lower than last year (EUR 258 million), mainly because the construction of Nuon Magnum was temporarily halted. The construction of Nuon Magnum has meanwhile resumed.
Strategy
After the announcement on 23 February last that the Swedish company Vattenfall and the production and supply company Nuon wanted to join forces, further integration preparations were made. On 22 June the European competition authority gave the green light for the takeover subject to a remedy and on 17 June the sale was approved during an extraordinary shareholders’ meeting. The unbundling of the production and supply company Nuon and the network company Alliander was effectuated on 30 June 2009. One day after balance sheet date, on 1 July 2009, Vattenfall took over 49% of the shares from the incumbent shareholders.
For the editors
These results relate to the legal entity Nuon Energy (“Nuon”) and were compared with this entity’s results of last year. Last year, these results were consolidated and published with those of the network company, then both forming part of the former n.v. Nuon (now “Alliander”).
About Nuon
Nuon is an energy company whose 6,000 employees serve around three million consumers, businesses and organisations in the Netherlands, Belgium and Germany. Its key commitment is to supply energy that is reliable, affordable and as clean as possible. Nuon produces and supplies gas, electricity, heat and natural cooling and helps customers to reduce their energy use. The company operates as Business Group Benelux of the Vattenfall Group.