EVN AG (WBO:EVN) (Q3 2026) Earnings Call Highlights: Group Net Result Surges 21% to EUR525. ...

Negative Points

• Hydro generation conditions were historically weak due to an exceptionally dry and hot summer, leading to a decline in generation volumes and earnings.

• The Generation segment saw a significant decline, with EBITDA down 42% to EUR76 million, due to lower electricity prices, reduced hydro volumes, and the non-renewal of a reserve capacity contract for the Theiss power plant.

• Electricity generation volumes declined by 7% year-on-year, impacted by below-average wind and water flows and the loss of the thermal generation contract.

• The company expects a negative contribution to net result in the fourth quarter, with a projected range of minus EUR35 million to minus EUR55 million, due to seasonal factors.

• Cash flow from operating activities was affected by an increase in trade receivables and a decline in trade liabilities, leading to a working capital drag.

• Gross cash flow was down 1.6% year-on-year to EUR750 million, partly due to noncash earnings components related to the deconsolidation of the international project business.

• The company faces ongoing challenges from market price volatility and climate-related effects, which could impact future earnings.

Q & A Highlights

Q: The new full-year guidance implies a negative contribution of EUR35 million to EUR55 million for the fourth quarter in terms of net result. Can you elaborate on why you expect such a negative fourth quarter? A: Alexandra Wittmann (CFO) explained that the negative fourth-quarter expectation is due to a clear seasonal bias in EVN's business. There is significantly higher energy demand during the winter half-year, and consequently, the fourth quarter results during the summer traditionally differ from the rest of the year, a situation also seen last year.

Q: In the last conference call for H1 results, you guided for an almost flat EBITDA year-on-year. Is this outlook confirmed or improved considering the increase in the net profit guidance range? A: Alexandra Wittmann (CFO) confirmed the full-year EBITDA guidance for now, stating that the final outcome will depend on the development of prices and volumes in the coming months.

Q: Regarding regulated networks in Austria for 2027, what should we expect in terms of moving parts related to the regulatory framework, the allowed WACC, and tariff changes? A: Alexandra Wittmann (CFO) stated that no changes are expected for the WACC. The current framework remains at 4% for the existing regulated asset base (RAB) and over 6% for new investments.

Q: Can you provide more details on how the 18% revenue decline in the Generation segment is split between pricing and volume effects? A: Alexandra Wittmann (CFO) quantified the impact for hydro, noting a negative EBITDA effect of about EUR12 million, split roughly equally between volume and price effects. For wind, the commissioning of new wind parks compensated for all of the negative volume impact and even most of the price effect.

Q: What are the key drivers behind the strong performance in the Networks segment? A: Alexandra Wittmann (CFO) highlighted that the Networks segment showed a strong performance, with EBITDA up 21% to EUR348 million. This was driven by ongoing high investments in network infrastructure, growth in the regulated asset base (RAB), and resulting higher tariffs, in line with Austrian regulation.

Q: What is the status of the battery storage expansion and its role in the company's strategy? A: Alexandra Wittmann (CFO) noted that EVN commissioned its first large battery storage facility in April, co-located with a PV plant, and expanded it from 20 to 40 megawatt hours during the summer. Around one-third of the 300-megawatt battery storage target for 2030 is planned to be built in Bulgaria and North Macedonia, highlighting the focus on enhancing flexibility.

Q: What is the outlook for the Energy segment, particularly regarding the supply business EVN KG? A: Alexandra Wittmann (CFO) stated that the normalization of earnings in the Austrian supply business (EVN KG) continued as expected, contributing EUR38 million compared to EUR1.5 million in the prior year. The full-year result will largely depend on the further development of market prices.

Q: What are the key drivers behind the improved financial results and the increase in group net result? A: Alexandra Wittmann (CFO) attributed the 21% increase in group net result to EUR525.1 million to several factors, including a higher dividend contribution from Verbund and three positive one-off effects totaling EUR52.5 million. These include a EUR10 million badwill from a fiber infrastructure acquisition, a EUR10 million reversal of a tax provision, and EUR32.5 million from discontinued operations related to the sale of the international project business.

Q: How did the sale of the international project business impact the balance sheet? A: Alexandra Wittmann (CFO) explained that the sale had a positive effect on net debt of EUR206 million in total, comprising a EUR100 million purchase price and EUR106 million in former intragroup financing assigned to STRABAG. This led to a decline in net debt to EUR942 million by end of June, though it is expected to increase to about EUR1.2 billion by the end of September due to high investments.

Q: What is the company's investment plan and focus areas? A: Alexandra Wittmann (CFO) confirmed that EVN plans to invest up to EUR1 billion annually up to 2030, with around 80% invested regionally in Lower Austria. Key areas include network infrastructure, renewable generation, battery storage, e-charging infrastructure, and drinking water supply.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .