BAKU, Azerbaijan, May 29. Axpo's adjusted earnings before interest and tax (EBIT) in the first six months of 2023/24 financial year amounted to CHF 1,476 million, a decrease from CHF 2,242 million in the previous year, Trend reports via the company.
Despite all business areas contributing positively, earnings from Swiss customers were notably marginal. The average price achieved for electricity generated by Swiss power plants was 5 cents per kilowatt hour (kWh), influenced by prices hedged three years prior.
In the first six months of the financial year, Axpo reported total income of CHF 4,217 million, reflecting a 35% decline compared to the same period last year. This drop was primarily attributed to significantly lower prices for electricity and gas.
Adjusted earnings in the Generation & Distribution and CKW business areas saw an increase due to higher electricity production compared to the previous year. Hydropower production rose by 18%, generating 4.7 terawatt hours (TWh), while nuclear power production increased by 3% to 10.6 TWh. New renewable energies also saw a 12 percent rise, reaching 1.1 TWh. Additionally, the sale of three French wind farms contributed significantly to earnings.
The Trading & Sales division posted strong results despite decreased market volatility, which reduced earnings potential. However, the normalization of market prices in Europe led to increased interest from industrial companies in long-term corporate power purchase agreements (PPAs). As a leading player in PPAs, Axpo capitalized on this trend, gaining more customers. The ongoing growth of the PPA market, driven by decarbonization efforts, is expected to offer further earnings potential for Axpo.
Operating income for the period, factoring in a CHF 338 million accounting mismatch and a CHF 159 million positive impact from funds for decommissioning and dismantling nuclear power plants (STENFO), totaled CHF 1,297 million, down from CHF 3,854 million in the prior year. The net result for the reporting period was CHF 1,221 million, compared to CHF 3,214 million previously.
Axpo's strategic focus on adapting to market conditions and leveraging opportunities in renewable energy and PPAs is critical to maintaining and enhancing the company's profitability amidst ongoing industry challenges.
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