Aare-Tessin Ltd. for Electricity (Atel) is an energy service provider with successful activities throughout Europe. Sales generated by the companys electricity trading and energy services activities reached new record levels, with consolidated turnover up 28% to CHF 4.2 billion. This growth is mainly attributable to a strong increase in energy trading volume, and price developments in the energy market. Profits grew 22% to CHF 165 million. Consolidated cash flow reached CHF 540 million in the reporting year, up 16% on the previous years figure thanks mainly to an improved operating result in the energy business. With both power station projects in the Olten region now concluded, investment of CHF 174 million is CHF 260 million below the figure for 2000. The Board of Directors is proposing an unchanged dividend of CHF 20 per share.
Energy business sees strong growth The energy segment considerably exceeded expectations in 2001. Electricity sales rose 58% to 53 billion kWh. This steep increase is mainly due to high trading volumes with OTC standardised products. Northern Europe is the most important region in turnover terms, contributing 39% of the consolidated total. Next is Southern Europe, at 30%. Switzerland accounted for 18% of Atels energy turnover, with Central/Eastern Europe contributing 13%. Atel has established its own sales companies in France, Poland and Greece in order to strengthen the companys market position in these countries.
Atel takes stake in Italys second-largest energy producer Atel is acquiring and building its own production facilities in Italy as a means of extending its position in that countrys electricity market. The most recent success is the Edipower consortium, in which Atel holds a 13.3% stake. Edipower received official approval for its acquisition of Eurogen, an Enel power station company with generating capacity of 7008 megawatts and around 2200 employees. After updating the new power stations, Atel will have annual capacity of around 7 billion kWh at its disposal nearly as much as the companys Swiss generating capacity. This move makes Atel a partner in Italys second-largest electricity producer. Atel is realising further power station projects in northern Italy independently of its involvement in Eurogen.
Energy service established as a second pillar In the energy services segment, Atel Installationstechnik Group in Zürich and Heidelberg-based GAH reported improved results despite generally tougher conditions. The acquisition of BWB Gebäudetechnik AG in Basel and Sesti Impianti S.p.A. in Milan served to boost revenues. The energy services segment contributed around 36% of consolidated turnover.
Strong increase in corporate value Low-margin trading with standard products showed strong growth in 2001. It was for this reason that Return on Sales (ROS) declined from 4.1% to 3.9%. Return on Equity (ROE) rose from the previous years figure of 9.4% to 11.0%. Economic Value Added (EVA) of CHF 215 million (previous year: CHF 76 million) reflects the level and quality of operational results achieved, while representing a sustainable increase in corporate value. The Atel Groups ratio of net debt to EBITDA (gearing) fell from 1.6 to 0.9. Thanks to increased group profit, earnings per share grew from 41.4 to CHF 51.8. Atels stock-market capitalisation at the end of 2001 stood at around CHF 2.6 billion.
Electricity market legislation for orderly market opening The EMG and its associated decree are political compromises. Atel broadly supports the new legislation, albeit with various specific reservations. These particularly concern remuneration for third-party grid access and inordinate ecological, regional and socio-political concessions. Liberalisation is important for the Swiss economy. The EMG establishes a clear foundation for market opening, and brings order to developing free competition.
Outlook for the current year Atel is entering 2002 with a solid balance sheet and plenty of financial muscle. In the energy segment, the Atel Group anticipates a continuing rise in demand for OTC standardised products. Economic developments will affect results in the energy services business. Both Atel Installationstechnik AG and the GAH Group have shown gratifying developments in the first quarter of 2002. Further growth in turnover is expected, along with an operating result similar to that of the previous year.
Aare-Tessin Ltd. for Electricity Corporate Communications