The higher electricity wholesale prices are again leaving their mark on the balance sheet of the domestic energy supplier Verbund. At EUR 514.4 million, consolidated earnings in the first quarter were 256 percent up on the previous year. The outlook for the full year has been raised. The management now expects 1.55 to 2 billion euros in net profit instead of the previous 1.4 to 2 billion euros, it said on Thursday.
Economist Oliver Picek from the Momentum Institute locates an “excess profit” of EUR 362 million in the first quarter due to the electricity price effect. “The excess profit is defined as the difference to the pre-war level,” explains Picek in a broadcast. If you compare the Verbund result for the first quarter of 2022 with the average for the first quarter of 2018 to 2020 – before the extraordinary price increases – the result is a Profit increase of 238 percent, ie an excess profit of 362 million euros in the first three months of this year alone.
90 percent profit tax
There are also signs of a high excess profit for the other quarters, especially since the association expects a profit of up to two billion euros for the full year 2022. “The state can skim off these profits with an excess profit tax. It can be given back to those who are suffering from rising prices and constantly paying higher electricity bills,” says Picek. The Momentum Institute recommends a profit tax of at least 90 percent on excess profits. With this tax rate, the state revenue from an excess profit tax alone through the association could amount to up to 1.05 billion euros in 2022.
Other figures from the quarterly balance sheet: In the first quarter, sales of EUR 2.532 billion were more than three times as high as in the previous year (+210 percent). Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 169 percent to EUR 814.9 million from January to March – for the full year EUR 2.8 to 3.5 billion instead of the previous EUR 2.6 to 3.5 billion euros expected.
In addition to the strong increase in futures and spot market prices on the wholesale market for electricity, there was also a positive contribution to earnings from the full consolidation of Gas Connect Austria GmbH (GCA). The regulated long-distance gas and distribution system operator in Austria was acquired with effect from May 31, 2021. The contribution of flexibility products also increased significantly. In the thermal generation segment, the increased use of the gas-fired combined cycle power plant in Mellach led to positive earnings contributions.