Austrian power producer and grid operator Verbund AG (VER.VI) wants to sell non-core assets to create extra financial leeway in a tougher 2010 business climate, its chief executive told Dow Jones Newswires.
Austrian power producer and grid operator Verbund AG (VER.VI) wants to
sell non-core assets to create extra financial leeway in a tougher 2010
business climate, its chief executive told Dow Jones Newswires.
The company, owned to 51% by the Austrian state and the country's largest power
producer, is looking to raise up to EUR150 million this year from selloffs, and
more money down the line, Chief Executive Wolfgang Anzengruber said in an
interview.
"We have some minority shares in other companies that would do for
divestments, and a couple of wind projects we did in the past but haven't
concentrated on developing," Anzengruber said.
Verbund's non-core minority stakeholdings consist mainly of interests in
Austrian regional energy producers and distributors, purchased partly for
historical and political reasons, but also as a step towards a planned bundling
of the Austrian marketing and distribution efforts of a number of the companies
in a plan called the Austrian Power Solution.
The plan was hatched around 10 years ago, but never materialized. Anzengruber
said the plan was now outdated and irrevocably off the table. As a result, the
assets might be put up for sale, he said.
The holdings include 35% stakes in the provincial government-controlled power
companies in Styria and
Carinthia
, a
10% stake in Burgenland's power company and 5.8% of
Upper
Austria
's.
"I think in some portions we can do it," he said.
The wind power assets eligible for sale are a number of yet undeveloped wind
power projects based in Eastern and Southeastern Europe, where Verbund has
canceled all projects but one in order to cut capital expenditure and adjust to
less profitable times ahead.
On March 2, Verbund said its 2009 net profit fell 6.2%, to EUR644.4 million,
due to weaker electricity prices, and warned that a tougher price environment
and higher debt expenses will cut severely into its 2010 earnings and dividend.
Anzengruber estimates Verbund's 2010 earnings before interest and tax, or EBIT,
will drop 25%, or EUR250 million, from 2009, to between EUR750 million and
EUR800 million.
Concerning dividends, Verbund intends to return to a payout ratio of between
45% and 50% of net profits in 2010, from around 60% in 2009, which puts
Anzengruber's 2010 dividend estimate at EUR0.75 to EUR0.80 a share, down from
the EUR1.25 a share proposed for 2009.
Among the scrapped projects, tbe most notable was a plan to build two gas-fired
power plants along or close to the planned Nabucco natural gas pipeline, and EU-backed
project set to transport gas from the Caspian region to
Europe
by
2015.
"There were some ideas on the Nabucco side. We discussed one gas-fired
power plant in
Romania
and
also one in
Slovenia
, but
they are clearly out of our plans now," Anzengruber said.
All in all, Verbund has shaved EUR900 million off its five-year investment
program, which now allows for planned investments of up to EUR2.7 billion.
In addition to this capex program, Verbund may spend money buying extra power
production and distribution capacity in
France
and
Turkey
,
Anzengruber said.
In
France
,
where Verbund holds a 46% stake in listed power producer POWEO SA (ALPWO.FR),
the government has identified a string of hydropower concessions it wishes to
commission in clusters in coming years, adding some 5 gigawatts to the
country's generating capacity.
"That's an aspect we are definitely interested in. It will meet our
competencies very well," Anzengruber said, adding that Verbund would focus
on concessions for mid-sized plants in the French Alps. But it could easily be
another two years before the French government is ready to open the tenders for
bidding
More rapid growth might come from Turkey's efforts to privatize 45 power
plants--or about a third of the country's installed power production
capacity--this year. EnerJisa, Verbund's Turkish 50-50 joint venture with
Sabanci Group, aims to build a generation capacity in
Turkey
of 5
gigawatts by 2015, or 10% of the country's total generation capacity, up from a
current production of 455 megawatts, but the privatizations program might
provide a convenient short cut to beefing up Verbund's presence in the country,
Anzengruber said.
"It would enable us to take move faster in the direction of our target. Some
of these plants are old and inefficient, but we will take a look at them, and
if it makes sense we will make a decision in this direction," Anzengruber
said, also flagging up the possible participation in privatization tenders for
Turkish power distribution companies.
EnerJisa bought Baskent in 2009, a regional power distributor supplying 3
million people around
Ankara
with
electricity. More buys could follow in a push to level out the risks of
producing power in a closed market place, Anzengruber said.
"There could be a demand for balancing out the generation side with a
larger distribution side, depending on whether the Turkish market becomes more
open. If not, that could lead us to decide to do another acquisition on the
distribution side," he said, pointing to the bigger cities in the western
part of the country as the most viable distribution areas.
"
Istanbul
would
be very interesting, no doubt, but that's not on the table at the moment,"
he said.
Turkey
is
privatizing its entire distribution network in stages; the next round is
scheduled for the fall of 2010.
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