Atel Group results for the first half of 2006

Based in Olten and active throughout Europe, the Atel Group can look back on a highly successful first half of 2006. The Group generated consolidated turnover of CHF 5.6 billion in the first six months, which is equivalent to a rise of 46 % over the corresponding period of the previous year. Consolidated operating profit (EBIT) rose by CHF 150 million to CHF 458 million, equivalent to an increase of 49 % – or 41 % when adjusted for the effects of currency conversion and of changes in the scope of consolidation. Group profit after income taxes, including minority interests, increased to CHF 359 million – a rise of CHF 140 million, or 64 %. This large increase was mainly due to one-off exceptional effects as well as to a rise in the volume of energy deliveries while energy prices continued to climb.

Energy segment (additional market opportunities in central and eastern Europe) The results achieved by the Energy segment were eminently satisfactory, although trends in European energy markets varied widely. In Central and Eastern Europe particularly, advancing liberalisation created additional market opportunities. At a European level the price of electricity at first continued to rise, suffering a fall at the end of April and then stabilising at a high level. These circumstances enabled the Energy segment to generate turnover of CHF 4.9 billion in the first six months of 2006, an increase of 55 % over the previous year’s corresponding figure. Apart from the high price level, the major contributory factor was a 31 % increase in deliveries to 60.4 terawatt-hours (2005: 46 TWh). The Energy segment’s operating profit (EBIT) soared by 53 % to CHF 441 million. All business units contributed to this striking improvement. Trading is functioning with particular success: it succeeded in taking full advantage of the opportunities that presented themselves in the various markets. In the first half of the year, in addition to conventional physical deliveries, Trading conducted transactions in standardised products totalling some 101 TWh with external counterparties, to the value of CHF 6.8 billion. The corresponding figures for the previous year were 70 TWh and CHF 3.8 billion. As in previous periods, the net trading profit from standardised products traded with third parties – which totalled 20 million francs in the first half-year (2005: 23 million francs) – has been included in turnover. Additionally, the profits for the segment were influenced by one-off exceptional revenues.

Energy Services segment: significant improvement after restructuring The Energy Services segment consists of the Atel Installationstechnik Group (AIT) in Zurich and the GAH Group in Heidelberg, Germany. Having completed its reconstruction, the segment made a substantially higher profit contribution than in the previous year. Net turnover increased from CHF 679 million to CHF 703 million (+ 4 %). In local-currency terms, with changes in the scope of consolidation excluded, turnover was up by 17 %. The consolidated operating profit (EBIT) doubled to CHF 16 million, though with changes in the scope of consolidation excluded the increase was only 61%. 

Outlook Based on this very encouraging first-half result, Atel expects that turnover and earnings for the full year – subject to extraordinary events – will substantially exceed the previous year’s figures (2005 turnover: CHF 8.6 billion, 2005 Group profit: CHF 413 million). It must be borne in mind that the energy business in the first half of 2006 was characterised by seasonal effects and one-off special revenue items that cannot be expected to occur again. On a current view the momentum of operating earnings is therefore expected to remain good in the second half of the year, though less dynamic – in the Energy segment particularly. 

Aare-Tessin Ltd. for Electricity Corporate Communications

**  excluding variance in time deposits and securities *** average number of full-time equivalent employees