Development of business in the first quarter of 2009/10

2/25/2010

(October 1 – December 31, 2009)

• Positive development of business despite of difficult economic conditions
• Sales development in the energy business shaped by cold weather
• Start-up of the district heating transmission pipeline to Sankt Pölten
• Higher reliability of supply in the Lower Austrian electricity network
• Concession agreement for natural gas distribution and natural gas supply in Split, Croatia
• EVN wins tender to construct two wastewater treatment plants on Cyprus
• Positive outlook for the 2009/10 financial year

	2009/10 Q. 1 EUR m	Change in %
Revenue	769.2	+4.5
EBITDA	157.2	+17.7
EBIT	95.1	+8.3
Group net profit	74.2	+35.3

The energy sector environment in the first quarter of 2009/10 (October 1 – December 31, 2009) was characterised by lower temperatures in Austria and Macedonia and higher temperatures in Bulgaria. Despite of the partial economic recovery in the second half of 2009 the primary energy and electricity prices as well as the costs of CO₂ emission certificates declined significantly compared to the prior-year quarter.

Considerable EBIT improvement and significant improvement of group net profit

Despite the ongoing unfavourable influencing factors negatively impacting the economy and the energy industry, the 2009/10 financial year began well: In the first quarter 2009/10, EVN’s total revenue rose 4.5%, to EUR 769.2m. In the energy business, the comparatively cold winter led to greater energy demand for electricity, gas and heat. The Environmental Services segment also generated higher revenue.

Despite increases in electricity, gas and heating sales volumes in Austria and South-eastern Europe, the item “Electricity purchases and primary energy expenses” only rose slightly, which is related to the declining wholesale prices for electricity and primary energy. The items “Cost of materials and services” and "Personnel expenses" remained stable. Despite of the increase of depreciation and amortisation primarily as a consequence of an impairment loss for the wind park in Kavarna due to the delayed project completion and despite of the higher other operating expenses, EBIT climbed 8.3% to EUR 95.1m.

There was a turnaround in the financial results, which improved from –EUR 13.9m to EUR 3.6m in the first quarter of 2009/10. Income from investments in associates included at equity remained almost constant, interest income and other financial results, which was negatively affected in the previous year by the crisis on global financial markets, improved considerably. Accordingly, the profit before income tax totalled EUR 98.7m, a rise of 33.5% from the previous year’s level. Hence, Group net profit notedly amounted to EUR 74.2m, an increase of 35.3%.

The gross cash value in the first quarter 2009/10 climbed 35.7% above the comparable period of the previous year, to EUR 146.4m. Since the last balance sheet date on September 30, 2009, the balance sheet total of EVN has fallen slightly by 1.0%, to EUR 6,625.5m. Equity decreased by 1.8% to EUR 3,070.3m. Accordingly, the equity ratio amounted to 46.3% at the quarterly balance sheet date of December 31, 2009. Taking account of the net debt of EUR 1,468.2m, the gearing was 47.8%.

Milestones in the reliability and security of the energy supply in Lower Austria

Several large projects in the Lower Austrian region supplied by EVN were concluded in the first quarter of 2009/10. In October 2009, the district heating transmission pipeline from Dürnrohr to Sankt Pölten with a length of 31 kilometres was put into operation, entailing total investments of EUR 35.0m. Accordingly, starting in the 2009/10 heating season, EVN supplies 200 GWh of district heat, and covers two-thirds of the entire district heating requirements of the Lower Austrian provincial capital. In order to further improve the reliability and security of the energy supply in Lower Austria and to more effectively connect the Theiß power plant to the high voltage network, a 380 kV transmission line between Etzersdorf and Theiß also came on stream in October 2009. The transfer of wind energy was also made possible during the reporting period by the completion of the new 18 km long 110 kV transmission line from Eibesbrunn to Gänserndorf.

New environmental services projects

In October 2009, EVN was awarded a contract to plan and build two wastewater treatment plants in Famagusta and Morphou, Cyprus. The project, financed by the European Commission and scheduled for completion within a period of 24 months, involves a turn-key facility entailing total investments of EUR 11.4m and a capacity of around 44,000population equivalents. Furthermore, as part of a consortium with a local construction company, EVN was contracted to build and then operate a wastewater purification plant in North Nicosia for a period of ten years, with a daily capacity of about 30,000 m³. In December 2009, EVN was awarded a contract to construct a waste treatment plant in Moscow. The final capacity of the new facility will depend on the environmental permit, which is still outstanding but is expected to be granted in the near future.

Outlook

After the first quarter of the new financial year, we anticipate increased revenue and results from operating activi-ties for 2009/10 as a whole, despite difficult economic conditions. The financial results will likely be above the pre-vious year’s level, despite the continuing low earnings contributions from our investments operating in the field of primary energy. From today’s perspective, thus Group net profit can also surpass the prior-year level.

The complete Letter to Shareholders Q. 1 2009/10 is available at www.investor.evn.at.