6 July 2010 - In the first half of the 2009/10 financial year (1 October 2009 to 31 March 2010) Axpo Holding AG achieved energy sales of 35 395 million kilowatt hours (kWh), a rise of 3.3% over the figure for the previous year. Operating profit at Axpo Group fell by 15% to CHF 416 million (CHF 490 million in the previous year). Despite the decline, Axpo will continue to invest in order to ensure the security of electricity supply in Switzerland.

The difficult market environment significantly impacted the first half of the 2009/10 financial year. First-half operating profit at Axpo Group was CHF 416 million, 15% lower than in the previous year (CHF 490 million). The primary factors responsible for the decline were lower prices on international energy markets and the impact of the new regulatory framework for the Swiss electricity market. Other negative factors impacting on the operating profit included the acquisition costs from the terminated Energy Plus power plant project in Italy and the additional electricity procurement costs due to the breakdown of the French nuclear power plant at Bugey. The loss of electricity supply from France had to be offset inter alia by purchasing more expensive replacement electricity on the international electricity market. By contrast, net profit increased to CHF 348 million (CHF 218 million in the previous year) due to expenditure of CHF 410 million reported in the previous year resulting from conditions on the financial markets. Axpo Group overall revenue in the period to 31 March 2010 was CHF 3 586 million (-8%).

In the first half of the 2009/10 financial year, Axpo achieved energy sales of 35 395 million kWh, which is an increase of 3.3% over the figure for the previous year. Electricity sales in the winter months were also 2.5% higher than in the previous year due to the dry and cold weather conditions. It may be assumed that this increase in electricity demand will continue in the second half of the financial year due to the ongoing strength of the economy and that the decline in electricity consumption last year was an exception.

Opposition to projects for new renewable energies

Axpo is the largest Swiss producer of new renewable energies and focuses in particular on small-scale hydroelectric power and fermentable and combustible biomass conversion in Switzerland. Experience has shown that the public response to new renewable energies is not always positive when it comes to the realization of actual projects. The wood-fired power plant planned by Axpo Holz+Energie AG in Würenlingen in the canton of Aargau to produce green CO2-neutral electricity and heating energy using wood from local renewable forests was suspended at the start of 2010 due to opposition from the community. There is also opposition to the planned wood-fired power plants at sites in Kaiseraugst in the canton of Aargau and Bischofszell in the canton of Thurgau. In Bischofszell, the local referendum for the zoning amendment has been moved from spring to autumn 2010.

In the area of small-scale hydroelectric power, the local authorities in Ftan and Ardez in the canton of Graubünden have approved the project and the concession for the Tasna hydroelectric plant respectively. However, the project has been delayed by several months due to objections lodged by environmental groups. In the North Sea off Germany, EGL AG has taken a 24.1% stake in a project to construct an offshore wind farm with a capacity of 400 megawatts (MW).

CKW: concession agreements are valid

On 16 April 2010, the Swiss Federal Competition Commission released a report confirming the validity of the concession agreements already finalized. More than 80 per cent of the 79 local authorities in the canton of Lucerne have already approved the concession renewal. The conflict between the old concession agreement and the applicable Federal electricity supply legislation remains a problem for 14 local authorities. Due to the unbundling of the network and energy in terms of the new Swiss Federal Electricity Supply Act, concession agreements have to be amended in line with the Federal legislation.

Sustainability in focus

In spring 2010, the second sustainability report was published. Axpo continues to demonstrate its commitment to sustainability and full transparency with another Environmental Product Declaration, this time for the Wildegg-Brugg run-of-river power plant. In 2009, a lifecycle analysis was conducted for the Kompogas facility in Otelfingen in the canton of Zurich. Already in 2008, the Beznau nuclear power plant was the first nuclear plant in Switzerland to receive EPD® environmental certification. This environmental audit is currently being recertified due to new findings in the materials cycle. By 2012, additional certification is planned for other types of power plants (pumped-storage power plants, etc.). A greenhouse gas inventory for the entire Group and a wide range of environmental, financial and social measures underline Axpo's commitment to energy production that is sustainable, ecological and financially successful.

Electricity supply gap worse than previously assumed

Delays in the expansion of new renewable energies and the elimination of the option to use gas-fired combined cycle power plants (due to the requirements for CO2 compensation) have exacerbated the anticipated electricity supply gap in Switzerland. The new study on the medium- and long-term outlook for electricity released on 20 May 2010 has reinforced Axpo's intention to give the highest priority to the replacement of the nuclear power plants at Beznau I and II and Mühleberg in collaboration with BKW-FMB Energie AG. On 30 October 2009 Axpo and BKW submitted documentation pertaining to their applications for outline approval, revised at the request of the Swiss Federal Nuclear Safety Inspectorate (ENSI) in April 2009, to the Swiss Federal Office of Energy (SFOE). On 1 January 2011, SFOE will request the cantons to submit their comments on the three applications for outline approval within a period of three months.

Despite the difficult environment, Axpo continues to invest in projects to ensure the security of electricity supply. The average number of employees rose to 4 354 full-time equivalents due to the continued expansion of business activities in Switzerland and abroad. In comparison to the previous year, Axpo created 359 new jobs.

Given the ongoing challenging conditions in the energy market, it will probably be difficult for Axpo Group even to repeat the results of the 2008/09 financial year.

Axpo will announce the results of the 2009/10 financial year at a financial results media conference on 26 January 2011.

Additional information:
Axpo Holding AG | Corporate Communications
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Anahid Rickmann | 044 278 41 68