Axpo Group reports a consolidated result of CHF 1,436 million (+36%) for the 2006/07 financial year (as of 30 September 2007). The good result is, in particular, due to sustained and dynamic growth in international electricity trading, optimum use of production capacity and several other special factors. The overall result adjusted for special factors was CHF 813 million, which is a substantial improvement on the prior-year result of CHF 631 million.

Axpo's electricity customers are the main beneficiaries of this good result. The excellent trading profit on foreign business enables Axpo to offer electricity in Switzerland at competitive prices. For example, compared to other parts of the country the price of electricity in North-Eastern Switzerland has been very low for a number of years. In order to continue to provide a secure and ecologically compatible supply of energy at economic prices, Axpo will invest approximately CHF 10 billion in the expansion of its domestic production facilities and its infrastructure until 2020.

CHF 623 million from special factors
At CHF 9,208 million, sales revenue came in almost on a par with the previous year’s figure, even though the shift from traditional physical electricity sales towards energy derivatives trading continued unabated. As in the year before, special factors had a substantial impact on the operating and net profit. These include adjustments to the valuation of production plants and energy purchasing rights as well as book profits from the sale of the investment in Electricité de Strasbourg and from the regrouping of the securities portfolio. The total positive effect of special factors on the reported profit of CHF 1,436 million was CHF 623 million. Thanks to operating improvements, the cash flow was also higher at CHF 1,072 million (+ 43%). The expansion of Axpo Group's business activities resulted in a 9% increase in the average number of employees to 3,369 full-time equivalents.

Nuclear energy makes a reliable contribution
Axpo's total energy sales improved by 1.1% year-on-year. In the aggregate, 113.5 billion kilowatt-hours (kWh) of energy were sold (prior year 112.4 billion kWh). Gas sales increased substantially by 8% and electricity sales rose slightly by 0.5% in spite of the rather unfavourable supply environment characterised by low volatility, few opportunities on the electricity market and a decline in electricity consumption due to very mild weather conditions.

The mild weather caused energy sales in the supply area to drop by 3.5% in the past financial year. Production in the nuclear power plants proceeded without unscheduled interruptions and with an excellent plant load factor. This meant that nuclear energy production was high again and almost on a par with that of the previous year (- 0.9%). Hydropower production came in just slightly below the long-term average but substantially higher (+14.9%) than the previous year, which was very dry.

Strong growth of new energies
The Axpo subsidiaries again strongly expanded the production of new renewable energies. CKW increased its sales of "RegioMix" (electricity from natural sources) by almost 50%. Electricity produced from renewable sources increased by more than 40%. In the last year, for example, the Kompogas Group (in which Axpo holds a stake via NOK and CKW) produced approximately 10 million kWh of electricity in its nine power plants. At the same time it sold biogas as fuel. Kompogas is planning to increase its plants in Switzerland to 14 over the next three years. NOK also holds 20% of Tegra Holz & Energie AG, which received the Watt d'Or award for excellent energy projects from the Swiss Federal Office of Energy this year. Tegra runs two wood-burning power plants in Domat/Ems that produce a total of 43.5 megawatt thermal energy. Another group of 38-megawatt energy plants is under construction and will go on line in 2009. Axpo is already the largest producer of renewable energy in Switzerland, and will continue to strengthen this position over the coming years. Until 2030, Axpo will invest CHF 3 billion in the development of new renewable energies alone.

Competitive electricity prices thanks to profits and investments
As a public-sector company, Axpo belongs to its customers. Its profits benefit the population in the form of dividends paid to the owner cantons and taxes paid to the state. As Axpo has the required own production capacity, there is less need to buy expensive electricity on the open market. On the contrary: valuable Swiss peak current can be sold abroad as load balancing current in off-peak periods for good prices. Axpo's customers benefit from these profits through lower electricity prices. In this way Axpo meets its mandate: to ensure a reliable, ecologically compatible and economic supply of electricity to its customers.

The creation of resources is of vital importance for the future. Like other Swiss electricity suppliers, Axpo must in the next few years invest large amounts of money in the replacement of power plants that go off line, the renovation of existing power plants and grids, and the expansion of new renewables. The required funds must first be earned. Axpo is planning investments of approximately CHF 10 billion until the year 2020. If electricity prices are to stay fair, stable and competitive, own production capacity is needed. In the foreseeable future, electricity generated by own capacity will be cheaper than electricity bought on the market in peak periods. Investment in own production capacity therefore ensures low electricity prices and directly benefits the electricity customers: electricity prices in Axpo's supply area are still among the lowest in Switzerland.

Slightly weaker result expected for 2007/08
Special factors will either not impact the 2007/08 result or will not impact it to the same extent as last year. The continued high level of investment activity will mean higher financing costs and writedowns. Axpo is expecting the European energy markets to remain challenging and, as in previous years, trading activity will be volatile. The Electricity Supply Act that took effect in Switzerland on 1 January 2008 will affect Axpo in ways that cannot all be assessed at present. For the 2007/08 financial year, Axpo expects a result adjusted for special factors that will be slightly below the good result for the 2006/07 financial year.

Further information/enquiries:

Axpo Holding AG, Corporate Communications:
Hansjörg Schnetzer Tel. 044 278 41 23, 079 678 83 04
Daniela Biedermann Tel. 044 278 41 20, 079 304 03 89
Erwin Schärer Tel. 044 278 41 78, 079 407 12 25