MVV extends energy transition head start in a difficult market climate

Despite difficult underlying conditions, the Mannheim-based energy company MVV Energie AG (ISIN: DE000A0H52F5; WKN: A0H52F) has once again proven resilient with its focus on a #climatepositive future and its broad-based business model. This has most recently been confirmed in the half-year results for the current 2024 financial year (1 October 2023 – 31 March 2024), which MVV presented on Wednesday.

Sales for the first six months of the current financial year grew to around Euro 4.4 billion (previous year: Euro 4.1 billion). This increase was due in particular to the settlement of forward transactions that had still been concluded at a higher level of electricity prices.

“We have been operating in a challenging market climate, one characterised in particular by declining energy prices on wholesale markets and widespread insecurity, for several months now. As expected, our adjusted EBIT of Euro 299 million for the first half of the 2024 financial year therefore fell significantly short of the previous year’s figure”, explained Dr. Georg Müller, Chief Executive Officer of MVV. As at the beginning of the year, he stressed once more: “It should nevertheless be noted that the earnings for the previous financial year were influenced by positive one-off items, such as disposal gains from the sale of shareholdings and an exceptional performance in the Commodity Services business field due to developments in wholesale market prices.” Earnings for the first six months of the current 2024 financial year were positively affected above all by higher earnings contributions from operating proprietary wind turbines and the environmental energy business, which still benefited from higher electricity revenues in the period under report. MVV also generated higher earnings from generation and its grid business, while earnings decreased in its project development business.

For the 2024 financial year as a whole, MVV has confirmed the forecast already published in its 2023 Annual Report. From an operating perspective, the energy company still without amendment expects the Group’s adjusted EBIT to range between Euro 360 million and Euro 440 million.

Heat transition as common task
MVV is continuing to press ahead with consistently implementing its #climatepositive course in line with its Mannheim Model and its three components of the heat transition, the electricity transition and green customer solutions. With regard to the heat transition, which in Germany is expected to receive fresh momentum from the new German Building Energy Act (GEG) and German Heat Planning Act (WPG), MVV’s CEO established: “Mannheim will be one of the first major cities in Germany to implement a heat plan. The city’s municipal heat plan presents a well-considered pathway for the future of centralised and decentralised heat.” It would now be a matter of working together on the necessary process of convincing people to gradually convert their heating to climate-neutral sources. “This task is incumbent on all parts of society within the city”, underlined Dr. Müller. MVV bore responsibility for large sections of the regional and local heat offering. This meant the company was an important partner to the city when it came to implementing the heat transition. “Today, we already cover 60 percent of heat requirements in Mannheim with district heat. In future, that figure is set to rise to 75 percent. To this end, we are continually expanding our district heating grid and gradually connecting up to 10,000 further buildings to the pipelines”, he added.

In parallel, MVV is fully converting its district heat in Mannheim and the region to green solutions by 2030. The energy company is currently in the process of connecting the phosphorous recycling plant and biomass power plant at its energy and recycling park in the north of Mannheim to the district heat grid. MVV will then already be able to cover more than half of heat requirements among households and commercial businesses in Mannheim with green heat. By comparison: Across Germany as a whole, renewable energies do not yet even cover 20 percent of heat demand. Furthermore, MVV provides those households that do not have a centralised heat option with climate-neutral decentralised heat solutions, such as heat pumps.

And the other major locations of the MVV Group in Offenbach and Kiel are also pressing ahead with the heat transition. Here, Stadtwerke Kiel and Energieversorgung Offenbach are pursuing ambitious specific conversion plans for their local heat supply.

Tailwind for the electricity transition
To accelerate its electricity transition, MVV will increasingly retain domestic wind and photovoltaic projects resulting from proprietary project development within the Group. In this context, for example, MVV is including two further windfarms which its project development subsidiary Juwi is currently building in Hochsauerland district in its generation portfolio. Once complete, the two windfarms will generate climate-friendly electricity for an arithmetic total of around 48,000 households.

Still on course to become #climatepositive by 2035
“The progress we are making with the energy transition shows once again how we are working towards our target of becoming #climatepositive by 2035 with consistency and business success. Even in a challenging market climate, our strategic focus on climate protection and our complementary and mutually reinforcing business models mean that we are well positioned to continue generating sustainable and profitable growth”, commented MVV’s CEO by way of conclusion.

The complete Half-Year Financial Report can be found on the internet at www.mvv.de/investors.