Positive developments despite difficult conditions

In the first half of 2012 the volume of electricity sold by the BKW Group was 9,748 GWh, corresponding to a decrease of 9% versus the first half of 2011 (10,716 GWh). Electricity sales in Switzerland fell by 7% year-on-year to 3,847 GWh, primarily due to reduced business with sales partners outside BKW's supply region. In terms of international sales, the volume of electricity sold in Italy rose by 8% to 868 GWh. The 64 GWh increase is attributable in particular to new customer acquisition.

Higher production from renewable energies
The total volume of electricity generated by BKW fell by 96 GWh year-on-year to 5,465 GWh. This reduction was a result of the market-related 505 GWh decline in volume generated by the Livorno Ferraris gas-fired combined-cycle power plant in Italy. Hydroelectricity production increased by 258 GWh to 1,793 GWh in the first half of 2012, due to higher precipitation. The first six months of 2012 saw a significant rise in the volume of electricity generated from renewable energies. In Switzerland this increase amounted to 13 GWh due to higher production volumes from Mont-Crosin wind farm. In neighbouring countries an increase of 142 GWh to 260 GWh was achieved, thanks to continued expansion of production capacity, good wind conditions and the very good technical availability of plants. At 3,217 GWh, the volume of electricity generated by nuclear power plants was only slightly below the prior-year level of 3,221 GWh. In the first half of 2012 Mühleberg nuclear power plant generated 1,630 GWh of electricity, corresponding to an increase of 9 GWh compared to the prior-year period.

Solid core business
In the first half of 2012, consolidated operating revenue generated by the BKW Group increased by 1.6% year-on-year to CHF 1,368.1 million. The Energy Switzerland segment posted a volume-related reduction in net sales to external customers, which dropped by 7.1% to CHF 552.9 million. However, the segment-related operating profit (EBIT) was significantly higher, rising by 54.0% to CHF 102.1 million. While the Energy International and Trading segment continued to face a difficult market environment in the first half of 2012, net sales to external customers rose by 7.5% to CHF 657 million, chiefly due to the international sales business. EBIT declined from CHF 41 million to CHF -14.8 million. This reduction is primarily a result of the further weakening of the euro and lower market prices. The Networks segment improved net sales to external customers by 23.8% to CHF 98.7 million, with the infrastructure business performing particularly well. Despite ElCom's reduction of chargeable costs for the distribution grid, EBIT rose by CHF 7.3 million to CHF 63.1 million, mainly on account of higher transit volumes and the effect of cost reduction measures.

Higher operating profit, good financial result
Personnel and material expenses were the first to be impacted by the Group-wide cost reduction and efficiency enhancement programme. The BKW Group improved EBITDA by 15.6% to CHF 255.2 million. Depreciation expenses were CHF 20.1 million higher year-on- year at CHF 99.3 million. This increase is attributable to the power generating facilities acquired in the second half of 2011 and to the revised cost estimate for nuclear waste disposal recognised at the end of 2011. EBIT was 10% higher at CHF 155.9 million. In the first half of 2012 the financial result improved year-on-year by CHF 27.4 million to CHF -21.6 million. This increase is due to the more favourable trend on equity markets, which had a positive impact on the return on shares in the decommissioning and disposal funds, which are measured at fair value. Contrary to the losses recorded in the prior-year period, the state funds posted a gain for the first half of 2012. BKW's net profit rose from CHF 90.5 million to CHF 112.3 million, corresponding to an increase of 24.1%.

Outlook
BKW expects the market environment to remain challenging in the second half of 2012, with energy prices remaining low and strong margin pressure on international markets. Regulatory requirements and a persistently strong Swiss franc will weigh down the full-year operating results for 2012. However, the cost reduction and efficiency enhancement programme will have a positive effect, although the full impact will not yet be felt. Taking all these factors into account and given the ongoing uncertainties, also on financial markets, EBITDA and net profit for the current financial year may deviate significantly from the adjusted figures for 2011.

Media Contact:
BKW FMB Energie AG Viktoriaplatz 2 3000 Bern 25 Telefon: 031 330 51 11 Telefax 0041 31 330 56 35 info@bkw-fmb.ch

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