“Our business success is the result of hard work“, the chairman of the management board of EEX, Dr. Hans-Bernd Menzel, emphasises and confirms the solid basis for further success.
The speedy growth of the trading volume on the Derivatives Market has made a decisive contribution to this success. The integration of the trading and clearing systems, which was concluded in 2005, formed an important precondition for this.
With a total of EUR 23.47 million, sales revenues were 47 per cent above the value for the previous year, which had amounted to EUR 15.96 million, during the year under review. The trading revenue from the Derivatives Market, which contributed a share of more than 65 per cent (65.34 per cent) to the sales revenues during the year under review, increased by roughly 56 per cent (55.68 per cent) to EUR 15.34 million. During the preceding year, the revenue from transactions on the Derivatives Market amounted to a sum of EUR 9.85 million. The total value of the power traded on the Derivatives Market in 2005 amounted to EUR 22 billion. The trading revenue from the Spot Market increased by more than 50 per cent from EUR 3.53 million during the previous year to EUR 5.35 million this year. With approx. 86 TWh, a trading volume was generated on the Spot Market, which corresponds to approx. 17 per cent of the annual consumption of electricity in Germany. The total value of the electricity traded on the Spot Market amounts to EUR 4.17 billion. Of the total sales turnover exchange fees accounted for EUR 2.36 million, whereas revenue from training courses for trading participants accounted for EUR 0.42 million.
Increase in volume increases results to record levels
With regard to the operating result the business year 2005 was even better than expected for EEX: After a narrow deficit of EUR 0.19 million during the business year 2004, EEX can now report positive earnings before income, tax and depreciations (EBITDA) to the amount of EUR 7.56 million.
The balance sheet loss to the amount of EUR 22.96 million consists of the profit for the financial year to the amount of EUR 3.37 million, the losses brought forward to the amount of EUR 25.82 million and an increase of the reserve for own shares to the amount of EUR 0.513 million. “It was possible to ensure the required liquidity at all times from our own cash flow; our financial situation is stable and strong. It corresponds to our expectations”, Iris Weidinger, Director Finance & Controlling, underlines.
As of the balance sheet date, 34 members of staff were employed at the headquarters of the company - compared with 31 employees during the previous year. Hence, EEX is organized very efficiently in terms of its human resources.
High confidence in EEX
With the publication of comprehensive trading data and of the bid curves from the auctions on the Spot Market, EEX has contributed a further essential share to the transparency on the European energy market in 2005. On account of its position as the biggest energy exchange in continental Europe whose prices form a reference for the market participants in Europe, it was again contacted regularly by supervisory and regulatory authorities, such as the German Federal Cartel Office and the Federal Network Agency, as a point of contact during the last year. Moreover, EEX also supported the Sector Inquiry by the European Commission with comprehensive information.
During the past business year, the open interest in the Derivatives Market for Power increased from 122 TWh to 148 TWh and, hence, reached a market value of approx. EUR 7.9 billion. This corresponds to the sum of the positions of the trading participants on the Derivatives Market which are open as of the balance sheet date. This dimension is an indication of the confidence which the trading participants have with regard to the fact that they can close their positions on EEX again at any time on account of the high liquidity and security.
Increasing numbers of trading participants and new territorial markets
With an increase in the number of trading participants of seven per cent EEX managed to further strengthen its position during the year under review. All in all, 132 trading participants from 16 countries were licensed for trading as of the end of the year under review. At the end of the preceding year, this number only amounted to 123 companies. Currently, EEX and its trading participants are supported by eleven renowned international financial service providers in their capacity as general clearing members.
The consistent international orientation of EEX is not only reflected in the increasing number of trading participants with registered offices abroad but also in the development of new territorial markets in Europe. In the third quarter of the past business year, trading in futures with physical fulfilment was started for the area of the national French transmission system operator RTE. The first delivery took place at the beginning of the current year. In addition to this, EEX also introduced clearing of transactions concluded off the exchange in France. In April 2005, spot trading had already been started within the area of the Austrian transmission system operator APG.
Perspective: Creation of a European clearing solution and important contributions to even more transparency
In 2005 EEX already paved the way for the current business year: with the decision regarding the spin-off of the clearing business into an independent company, European Commodity Clearing AG (ECC). “We are convinced of a European clearing solution for the European energy market”, Hans-Bernd Menzel, chairman of the management board of EEX confirms. That is also why the clearing house is based on a partnership approach – both with regard to the integration of further trading platforms and with regard to the shares in ownership on ECC.
Moreover, EEX also has a number of plans for 2006 with regard to the exchange. For example, it will launch spot trading in power for Switzerland and start trading in coal futures as well as clearing of coal contracts concluded off the exchange. And the launch of trading in gas could even take place in the course of the current year. The exchange and its executive bodies will deal particularly intensively with the topic of transparency during the current business year. With a considerable expansion of the range of information it offers, in particular on the topic of market making, EEX has already made a contribution to increased transparency on the electricity market. Since 10 April 2006 EEX has, moreover, bundled and published data by power plant operators regarding the availability of capacities and the actual generation of power. European Exchange AG currently operates a Spot and a Derivatives Market for energy and CO2 emission allowances. With currently 138 trading participants from 17 countries, it is the energy exchange in continental Europe with the largest number of trading participants and the biggest turnover. The range of services provided by EEX is complemented by related services such as the integrated clearing of exchange transactions and over-the-counter transactions (OTC clearing).
