By Nicole Lundeen
VIENNA--Austrian gas and hydropower utility Verbund AG (VER.VI)
lowered its 2014 earnings forecast Thursday due to a difficult
market environment and other factors affecting its power
plants.
Verbund now expects 2014 net profit for the year to reach around
70 million euros ($95.5 million), down from a previous forecast of
EUR150 million. Earnings, before, interest, taxes, depreciation and
amortization will be around EUR690 million rather than the EUR850
million previously forecast.
"The persistently difficult market environment and continued
pressure on the European wholesale prices are having a more
negative impact on earnings than planned," Verbund said.
Specifically, it cited a low supply of water in the first half, a
difficult market environment, and effects related to its planned
decommissioning of thermal power plants as reasons for the change
in outlook.
Low electricity prices on the spot market and write-downs in
Albania and Romania will have negative effect of EUR45 million on
Ebitda and of EUR41 million on net profit, Verbund said.
Verbund said the water supply in the first half of the year was
significantly below long-term averages, resulting in a negative
effect on Ebitda of EUR20 million and on net profit of EUR16
million. It added that it expects an average supply of water for
the remainder of the year.
The decision in May to decommission some gas and coal power
plants will negatively affect Ebitda by EUR118 million and net
profit by EUR36 million, Verbund said.
Write to Nicole Lundeen at nicole.lundeen@wsj.com
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