04/03/20142013 business year: STEAG Group achieves good result

Successful development in spite of difficult market conditions


Essen. The STEAG Group is in the black for the 2013 business year. “Our 2013 result is better than planned. We are happy with this development, which we have succeeded in bringing about despite a very difficult market environment,” said Joachim Rumstadt, Chairman of the Board of Management of the Essen-based energy company, presenting the figures for the 2013 business year.

STEAG achieved net income after taxes of 198.9 million euros (+ € 13.8 m). Sales also rose slightly to 2,936.4 million euros (+ € 158.7 m), especially as a result of higher energy sales by the power plants in Germany. STEAG was therefore able to fulfill the shareholders’ profit expectations for the third year in succession. “We are paying out 96 million euros to the shareholders for the past business year,” Joachim Rumstadt says.

“The dividend is even slightly higher than planned. This performance by STEAG, and in particular its flexibility in handling the most difficult market conditions, allows us to face the future optimistically,” as Guntram Pehlke, the Chairman of STEAG’s Supervisory Board, explains. “With this result and STEAG’s strategic alignment, Stadtwerke Konsortium Rhein-Ruhr has a good basis for the impending decisions on the planned complete takeover of STEAG.”

The consortium, consisting of seven municipal utilities, currently holds 51 percent of the shares in STEAG and intends to take on the remaining 49 percent, which is currently owned by Evonik Industries AG, before the end of this year.

Flexibilization of the power plant portfolio Marketing of capacity

STEAG made investments in the total amount of 363.8 million euros in 2013. The greater part of these once again concerned power generation, with 134.8 million euros going into energy from renewables. All in all, investments rose significantly from the previous year’s level (+ € 101.9 m).

STEAG has started to invest in the flexibility of its own power plants at an early stage. With this greater flexibility, it was not only possible to keep the STEAG power plants in the market in 2013, but also to operate them for around 15 percent more hours than in the previous year. STEAG invested around 30 million euros in the existing power plants for that purpose in 2013. The STEAG management has once again refrained from resolving any closures. On the contrary, STEAG is taking on additional capacity, such as a 350 MW virtual slice from RWE at the Bergkamen power plant, where STEAG is responsible for operation and maintenance. STEAG will be marketing this new slice from autumn 2014 onwards.

The success STEAG has had in developing its own marketing expertise after the expiry of longterm capacity reservation and electricity supply contracts is clearly shown by the past business year: Almost 100 percent of the power plant output for 2014 has already been marketed. For 2015, the figure is already over 70 percent.

In the form of Walsum 10, one of the most modern hard coal fired power plants in Europe commenced commercial operation in December 2013. There, STEAG has sold the greater part of the marketable capacity of 725 MW on a long-term basis – for the coming 20 years. Walsum 10 is therefore contributing to a sound level of earnings.

The service business was further expanded in 2013. From operation of power plants through maintenance to the marketing of power plant by-products, the STEAG subsidiaries have continued to develop favorably.

Expansion of renewables Combined heat and power generation an essential component

STEAG also significantly expanded generation from renewable energy sources in 2013, with the focus on onshore wind. The currently largest wind project in Germany is the Ullersdorf wind farm (43 MW), which is to go into operation in autumn 2014.

The foundation of a joint company with municipal utilities for the implementation of projects in the field of renewables is impending in the near future. Distributed generation has also continued to grow, with the installation of combined heat and power units based on bio-methane gas at six locations in Germany.

In addition, STEAG continues to back combined heat and power generation (CHP), and reports a stable development in district heating for 2013.

As in previous years, the STEAG overseas power plants in Turkey, Colombia and the Philippines also made an important contribution to earnings in 2013. “Foreign business is an integral part of the STEAG business model,” Joachim Rumstadt emphasizes.

In addition, wind farms in France (18 MW) and Poland (8 MW) are now on line, as is the concentrated solar power (CSP) plant in Arenales, Spain (50 MW). A wind farm in Romania (108 MW) is under construction. The service business is also constantly developing. With the taking on of the operation and maintenance of a 600 MW power plant in Botswana, STEAG now operates and maintains a capacity of over 4,000 MW abroad.

Prospects

“STEAG stands for security of supply. We accept the energy turnaround and are concentrating in Germany on defending domestic business and expanding the service sector,” says Joachim Rumstadt.

“The early flexibilization of the domestic power plant portfolio puts us in a position to extend their expected service lives.” STEAG looks favorably on the planned reform of the German Renewable En-ergy Act (EEG) announced by the federal government for the near future.

“The focus on a CHP approach in the government’s program is also in line with STEAG’s interests, as many of its power plants generate both heat and power,” says Joachim Rumstadt.

Against that background, STEAG regards itself as a driving force behind the linking of the district heating trunking lines at the Rhine and Ruhr which is desired by the government of North Rhine-Westphalia and is to be an essential step in achieving the CO2 emissions targets in that region.

Internationally, STEAG will continue to back growth – both in renewables and in fossil-fired power plants, which are still clearly in demand. The focus of STEAG’s activities is on countries where the demand for energy is rapidly growing. These include Turkey, Brazil, India and Indonesia, among others.

Both at home and abroad, the expansion of the service business continues to have priority. While STEAG is already the market leader in Germany in the recycling of power plant by-products such as gypsum and fly ash, this expertise is also to be given a firm basis and expanded abroad. And finally, the operation and maintenance of plants owned by third parties is a significant field of business which is constantly being developed.


Related files

STEAG balance 2013 summary en(59 K)
STEAG balance 2013 pressbriefing en(63 K)
STEAG balance 2013 Key Messages Cieslik en(56 K)
STEAG balance 2013 Key Messages Baumgaertner en(55 K)
STEAG balance 2013 Key Messages Geissler en(54 K)
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Frauke Riva
STEAG GmbH
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