Statement of financial position

Asset and financial position

EVN’s balance sheet total fell by EUR 441.9m, or 6.1%, year-on-year to EUR 6,841.8m as of 30 September 2014.

Balance sheet structure

Non-current assets declined by EUR 629.5m, or 9.8%, to EUR 5,777.7m and represent 84.4%, (previous year: 88.0%) of total assets. Intangible assets and property, plant and equipment were EUR 129.1m, or 3.3%, lower at EUR 3,738.7m, chiefly due to the above-mentioned impairment losses and in spite of an increase in property, plant and equipment. The carrying amount of equity accounted investees and other investments was EUR 85.0m, or 5.2%, lower than the previous year and amounted to EUR 1,553.8m. This development is attributable, above all, to a decline in the market value of the Verbund shares held directly by EVN AG as of 30 September 2014 and an impairment loss on the participation interest in Verbund Innkraftwerke GmbH.

Other non-current assets declined by EUR 415.4m, or 46.1%, to EUR 485.2m. This reduction resulted primarily from the impairment loss recognised on the leasing receivable from the thermal waste utilisation plant no. 1 in Moscow and the reclassification of EUR 223.7m in leasing receivables from the sodium hypochlorite plant in Moscow to non-current assets held for sale as of 30 September 2014 (previous year: EUR 0). The sodium hypochlorite plant was sold to the city of Moscow at the end of October after the balance sheet date.

Current assets declined by EUR 36.0m, or 4.1%, to EUR 840.4m. The increase in inventories was more than offset by a decline in securities as well as cash and cash equivalents.

Equity totalled EUR 2,632.7m as of 30 September 2014, which is EUR 446.5m, or 14.5%, lower than the previous year. The equity ratio fell from 42.3% in 2012/13 to 38.5% in 2013/14. The development of equity was influenced mainly by the negative Group profit recorded for 2013/14, the distribution of the dividend for the previous financial year in January 2014 and the change in the valuation reserve recorded directly in equity without recognition through profit or loss.

Equity totalled EUR 2,632.7m as of 30 September 2014, which is EUR 446.5m, or 14.5%, lower than the previous year. The equity ratio fell from 42.3% in 2012/13 to 38.5% in 2013/14. The development of equity was influenced mainly by the negative Group profit recorded for 2013/14, the distribution of the dividend for the previous financial year in January 2014 and the change in the valuation reserve recorded directly in equity without recognition through profit or loss.

Non-current liabilities declined by a total of EUR 68.9m, or 2.3%, to EUR 2,902.6m, mainly due to the reclassification of non-current loans and borrowings as short-term. The reduction in deferred tax liabilities and non-current provisions was contrasted by an increase in deferred income from network subsidies and other non-current liabilities.

Current liabilities rose by EUR 73.5m, or 6.0%, to EUR 1,306.5m, whereby the major effects were offsetting. The scheduled redemption of two bonds led to a decline in current loans and borrowings. In contrast, current liabilities were increased by the EUR 60.9m contract performance guarantee for the Duisburg-Walsum project that was drawn in November 2013 and a EUR 72.4m liability recognised for the repayment of revenue from previous periods based on a tariff decision in Bulgaria on 1 July 2014.

Value analysis

The weighted average cost of capital (WACC) after tax, taking into consideration EVN’s specific company and country risks, was set at 6.5%.

The return on equity (ROE) equalled –9.5% because of the negative Group net profit recorded for 2013/14. Economic Value Added (EVA®) was also negative at EUR –174.1m (previous year: EUR –20.7m). The operating return on capital employed (OpROCE) amounted to 2.9% in 2013/14 (previous year: 6.1%).

Liquidity position

Due to the strong cash flow from operating activities EVN reduced net debt by EUR 187.2m, or 10.3%, to EUR 1,622.4m in 2013/14. Combined with the decline in equity, this led to an increase in the gearing ratio from 58.8% to EUR 61.6%. In order to safeguard its financial flexibility, EVN AG has a syndicated credit line as well as bilateral credit commitments that were not drawn as of 30 September 2014 and are therefore available in full. The syndicated credit line was renewed prematurely in July 2014, whereby the volume was adjusted at EVN’s request to meet its financial needs and reduced from EUR 500m to EUR 400m. The term of the credit line was also extended to five years with two one-year extension options. In addition, two of the existing bilateral credit lines were extended prematurely during 2013/14. The remaining terms of the bilateral credit lines totalling EUR 175m, which were concluded with six banks, range from two to five years. Based on these reserves, EVN’s liquidity position can be regarded as stable.

Net debt in EURm, Gearing in %

• Additional information on the composition and terms of non-current financial liabilities is provided in the notes beginning on Non-current liabilities.