Increased interim earnings and cash flow
In the first six months of 1999, the European electricity market was again marked by an oversupply of electricity. Electricity power consumption in UCTE's West European interconnected grid rose by 1.5 % compared to 1998, and in Switzerland, consumption rose by over 4 % within the same period. In the first half-year of 1999, the Atel Group's electricity sales by volume totalled 13,780 million kWh, representing a 6.3 % rise. This increase was attributable to the extension of the West European interconnected grid and increased demand from industrial customers. As a result of low-cost procurement and thanks to excellent levels of internal production, gross earnings in the energy business were once again increased.
The Atel Group's consolidated net turnover in the first half of 1999 amounted to CHF 938 million, a rise of CHF 43 million or 4.8%. This increase was attributable to operating growth of 3% or CHF 27 million and the inclusion for the first time of Elektro-Sanitär AG, acquired on 1 March 1999, which contributed CHF 16 million. At CHF 97 million, the Atel Group's earnings on ordinary activities were 10.2% or CHF 9 million above the previous year's level. Including extraordinary income of CHF 38 million from the sale of Atel shares, Group profit including minority interests amounted to CHF 135 million.
Cash flow on ordinary activities was 8.9 %, or CHF 26 million, above the previous year's figure at CHF 318 million. Taking into account the exceptional book profits mentioned above, the Atel Group's cash flow amounts to a total of CHF 356 million. Fixed asset investments amounted to CHF 152 million (previous year: CHF 143 million).
In the second half of the year, the Atel Group anticipates little change in the operating environment. Consequently at the end of the 1999 financial year, on the basis of the accounting principles in accordance with FER which have previously applied, higher sales and turnover and slightly better operating results than in 1998 are expected. Group profits will however be affected by the changeover of accounting to conform with International Accounting Standards (IAS), and the associated changes in valuation principles.
Aare-Tessin Ltd. for Electricity Corporate Communications