Repower increases group profit

In 2021 the energy markets saw unprecedented price increases and volatility. In this highly volatile market environment, Repower managed to maintain a high level of financial power. Repower operates as a broad-based energy company along the entire electricity value chain in Canton Graubünden and in Italy. With its strategy of expanding and reinforcing its renewable energy business, Repower is actively contributing to realising a successful energy transition.

EBIT again better than prior year

Operating income (EBIT) was again higher than the previous year, up +6 % to CHF 82 million. Group profit increased 15 % to CHF 47 million. The Repower Group’s total operating revenues were up 89% to CHF 3.3 billion. This significant increase in total operating revenues was related to the higher volumes of electricity and gas sold and sharp increases in the price of energy products on the energy markets in 2021. On the basis of its hedging strategy, Repower has sold large parts of the electricity generated at its own power plants in advance. For this reason it has profited only sporadically from higher prices of electricity. On the other hand, as anticipated, the low price of electricity during the first lockdown in early 2020 had an adverse effect on trading results in (figures in the online report).

Last year the combined cycle gas turbine plant in Teverola again made a key contribution to grid stability in Italy. Demand for balancing energy in Italy has returned to normal compared with the prior year. Results at the Teverola combined cycle gas turbine plant declined accordingly. Repower Italy was able to largely compensate for this decline with increased margins in the renewable energy and retail business. Demand for electricity in Italy has recovered completely since the first wave of the Covid-19 pandemic.

The good result in Switzerland was possible among other things to extraordinary items. There was one-time income of CHF 21 million as a result of a purchase price adjustment in connection with the transfer of the high-voltage grid to Swissgrid in 2013 (comments on the financial results in the online report).

Own production in line with prior year

Repower’s own production (including interests) totalled 2,923 GWh, in line with the previous year. At 435 GWh, hydropower generated by Repower’s own assets was around two per cent lower than the long-term average. Below-average precipitation in Valposchiavo and the Prättigau, unfavourable snow melt and the commencement of work to modernise Robbia power plant restricted hydropower generation last financial year. Overall production at the wind and solar power plants in Italy was at the previous year’s level. This was despite a temporary decline in the contribution of solar power installations, which were renovated and modernised in 2021.

Doubling in investment

At CHF 104 million, investments at Repower were double the prior year. Investments primarily related to power generation assets and the grid infrastructure. In its capacity as the biggest grid operator in Canton Graubünden, Repower invested around CHF 25.4 million in its electricity grid last year. Further investment went particularly into the modernisation of Robbia power plant, the solar power installations in Italy and payment of CHF 24 million in reversion waiver compensation for the lower power plant stage in Valposchiavo. A large part of the investments were delivered by local businesses. The Repower grid recorded high availability last year, at 99.997 %.

Repower’s PLUG’N ROLL electric mobility business exceeded its sales targets thanks to various major orders and continues to develop successfully in a competitive market with great growth potential. Another doubling in sales is targeted for the current year.

In 2021 Repower paid water rates and other concession fees of CHF 17.5 million to the canton and municipalities. The number of employees increased from 580 to 607. Half of the new jobs were created in Graubünden and half in Italy.

Total assets and equity

The equity ratio is now running at 22 per cent (prior year: 44 per cent). This figure fell by half despite the fact that equity grew to CHF 883 million (+2 %). The reason for this is the extraordinary increase in the prices of energy products, which also led to an increase in total assets from CHF 1,982 million to CHF 3,982 million. The equity ratio is expected to return to within its target band of 35 to 45 per cent in the medium term.

Dividend

Given the good operating results for the year and the capital structure and liquidity, the board of directors moves that the annual general meeting of 18 May 2022 approve a dividend of CHF 4.50 per share.

Outlook

It is still not possible to predict the full impact of the war in Ukraine on the energy business, but it will have an influence and result in changes. Thanks to higher electricity prices, we anticipate growing revenues from the sale of electricity next year. However, the current high level of energy prices and the degree of volatility are challenging, and also entail risks for the energy industry. In the longer term we must not be blinded by the short-term rise in electricity prices, as already in the medium term the market is assuming significantly lower prices. It is too early to say for sure how Teverola combined cycle gas turbine plant’s contribution to financial earnings will develop with the introduction of a capacity market for balancing energy. Despite all the uncertainty, we anticipate successful business in 2022.

Repower supports canton and municipalities with strategic hydropower targets

In its cantonal hydropower strategy, Graubünden has announced that it intends to use the upcoming reversions to increase the value created by hydropower in the canton. Repower sees the hydropower strategy as a great opportunity and would like to support the municipalities and the canton as a reliable regional partner. Repower’s long-term strategy continues to be geared to increasing the company’s profitability as well as securing jobs at decentralised sites and boosting regional value creation and security of supply.

Notes
Financial information and Repower’s full 2021 online report can be viewed at repower.com/investors. From around 10am there will also be a presentation on the 2021 results at repower.com/presentations.
• The annual report appears in electronic form in German, Italian and English. In addition, a concise print version is available in German and Italian. In the event of differing interpretations, the German text is definitive.
• Together with the annual report, Repower also publishes a sustainability report in accordance with the Global Reporting Initiative (GRI) Standard. The sustainability report can be viewed at repower.com/nachhaltigkeitsbericht (in German).
• Repower will be presenting its 2021 results on 5 April 2022 at a media conference. Invitations have been sent out separately.
• In this text, expectations and assumptions about possible future developments are expressed. Given that these comments are subject to uncertainty and risk, actual developments may diverge from the statements contained in this news release.