.jpg)
The financial market crisis has had a considerable impact on the past financial year 2009 of European Energy Exchange AG (EEX). This was primarily due to the decline in trading activities by participants from the financial market sector on the Power Derivatives Market, which could not be fully offset by the increased trade volumes generated by the participants from the energy sector. In spite of these adverse effects, however, the sales and profit situation of EEX remained stable during the financial year 2009. “EEX has generated good results even under the difficult conditions of the past year“, Iris Weidinger, Chief Financial Officer of EEX AG, comments.
The consistently high trust which the market, the trading participants and the partners place in the stability of the EEX exchange platform, its structures, processes and the security constituted an essential factor for the development of business which was satisfactory overall with regard to the economic situation. “The high degree of trust which the market places in us at an international level is underlined by the fact that 248 trading participants from 22 countries were admitted as of the end of December 2009“, Dr. Hans-Bernd Menzel, Chief Executive Officer of EEX AG, emphasizes and, in this context, points to the well-functioning cooperation and partnership model. “Our expansion strategy based on partnerships constitutes an important cornerstone of the basis on which our Group is founded and, today, makes an essential contribution to the success of our business“.
Business results stable in spite of crisis
During the year under review the sales revenue generated by EEX Group amounted to EUR 34.6 million as against an adjusted value for the previous year of EUR 35.0 million. In this context, the fact that the values for the previous year comprised sales revenue generated by EEX Power Spot GmbH to the amount of EUR 8.2 million was taken into account. This subsidiary was transferred to EPEX Spot SE with effect from 31 December 2008 in the framework of the cooperation between EEX and Powernext and was, hence, no longer included in the scope of consolidation of EEX Group for the past financial year.
Moreover, the earnings before interest, taxes, depreciation and amortisation (EBITDA) also remained almost stable at EUR 25.8 million as against EUR 28.4 million for the previous year. Even though the financial year was seriously affected by the economic crisis, EEX once again generated a positive result for the year at EUR 7.2 million (2008: EUR 21.8 million). The company considers the fact that it managed to fully reduce the losses brought forward existing since its establishment as of the balance sheet date 2009 and that a dividend is paid out for the first time a significant success.
On the German and French Power Derivatives Market, which is operated by EEX Power Derivatives GmbH, the majority-owned Leipzig-based EEX subsidiary, the trade volume declined to 1,025 TWh during the financial year 2009 from 1,165 TWh in 2008 – which corresponds to a minus of approx. 12 percent. The volume in the Phelix Future product traded on the exchange declined by 8 percent to 257 TWh as against the previous year (2008: 278 TWh). However, this decline was offset by the transfer of the Powernext Power Futures to the French Power Futures product with a trade volume of 28 TWh, which was implemented last year. Thus, the volume traded on the exchange on the Power Derivatives Market remained stable at in total 285 TWh as against the previous year (278 TWh). The serious drop in the trade volume generated by trading participants from the financial market sector led to a significant decline in OTC clearing by approx. 17 percent to 740 TWh (2008: 887 TWh), which could not be compensated by the increased revenue of the trading participants from the energy sector. As a result of this, the total revenue on the Power Derivatives Market amounted to EUR 23.6 million in 2009 – which corresponds to a minus of approx. 8 percent as against the value for the previous year of EUR 25.6 million.
Trading on the Spot Market for Emission Allowances for the second commitment period, was launched on 16 January 2009, developed positively. During the year under review a total of 9.7 million tonnes was traded as against 0.65 million tonnes for the previous year and sales revenue to the amount of kEUR 386 (2008: kEUR 22) was generated. In this context the fact that trading for the first commitment period on EEX ended on 20 March 2008 has to be taken into account. At 23.6 million tonnes the volume traded on the Derivatives Market for Emissions fell considerably below the level for the preceding year (2008: 80.1 million tonnes). EUA Futures accounted for 23.0 million tonnes of these and CER Futures accounted for 0.6 million tonnes of these with the share in this volume generated by trading participants of the cooperation partner Eurex amounting to approx. 14 percent in 2009. The sales revenue generated on the Derivatives Market for Emissions amounted to kEUR 138 (previous year: kEUR 279).
EEX made good progress in the development of the natural gas market last year. As a result of this, the trade volume on the Spot Market for Natural Gas almost tripled at 3.5 TWh as against the previous year (1.2 TWh). During the year under review the sales revenue increased to kEUR 106 up from kEUR 37 during the previous year. As a result of the financial crisis the development on the Derivatives Market for Natural Gas was also characterised by reserve. At 11.4 TWh the trade volume decreased by approx. 30 percent as against the previous year (16.3 TWh) not least on account of the participants‘ significantly reduced willingness to enter into long-term positions. The sales revenue dropped to kEUR 184 as against kEUR 224 in the preceding year 2008.
On track with cooperations and partnerships
During the financial year 2009 the implementation of the cooperation project with the French Powernext S.A., Paris was successfully concluded and transferred into running market operation. The Power Futures of the partner exchange Powernext were contributed to EEX Power Derivatives GmbH as of 1 April 2009. Moreover, during the year under review the final formal step for the integration of the two Power Spot Markets was completed with the merger of EEX Power Spot GmbH into EPEX Spot SE on 1 September 2009.
The product cooperation on the Derivatives Market for Emissions with the Eurex Frankfurt AG derivatives exchange forms another important alliance. In the framework of this cooperation the partners supplemented the EUA and CER Futures with products with changed expiry and delivery dates last year in order to be able to fulfil the market participants’ requirements even better. Moreover, the cooperation was expanded to the Power Derivatives Market. As a result, Eurex customers have been able to trade and clear the EEX Power Derivatives products through their existing infrastructure since 25 November 2009. This means EEX now offers its core product – the Phelix Futures – to a global network of trading participants for trading and clearing.
The order by the Federal Ministry for the Environment regarding the execution of the primary market auction for European emission allowances in Germany for EEX constituted an important success in November of the year under review. As a result of this, ten percent of the German emission allowances will be auctioned off through EEX in 2010 and 2011. This corresponds to a volume of more than 40 million EUA per year.
EEX committed itself together with EPEX Spot in 2009 in the framework of two market coupling initiatives to foster the coordinated integration of the European power markets with the help of implicit auctions of transmission capacity. One of these commitments concerns the introduction of market coupling within the Central West Europe (CWE) region to which Germany, France and the Benelux countries belong. Moreover, EEX holds an interest in the Hamburg-based European Market Coupling Company GmbH (emcc) together with the Scandinavian power exchange Nord Pool Spot AS and the Transmission System Operators transpower stromübertragungs GmbH, Energinet.dk and 50Hertz Transmission GmbH (former Vattenfall Europe Transmission GmbH). This auction office carries out market coupling on the German-Danish border. Following initial problems and a series of improvements implemented afterwards operation was successfully re-launched in November 2009.
During the year under review EEX and the German Transmission System Operators have created a new, central transparency platform for generation and consumption data (www.transparency.eex.com) which went live on 30 October 2009 in order to further promote transparency in European energy trading. This aims at strengthening the comprehensibility of market pricing and the confidence which the public and the trading participants place in the markets and promoting European market development and market integration.
Continued stable growth
Overall, EEX has established a good position for itself within the competitive environment and, for this reason, believes that sustainable growth will be generated in the future. “It is our aim to significantly increase sales revenue and, once again, accelerate the speed of growth“, Chief Financial Officer Iris Weidinger describes the general direction for 2010. The preconditions have been created and are consistently developed further. According to Dr. Christoph Mura, who is in charge of the operative business as the COO on the Executive Board, a further strengthening of the human resources and a consolidation of the structures and processes are also planned for the year 2010. “The strategic alignment of the Group continues to be on internationalisation and partnerships”, Chief Executive Officer Hans-Bernd Menzel explains. “For the first time since its establishment EEX pays dividends. This is something we want to continue in 2010 and we, hence, look into the future with a positive outlook”, Menzel rounds off the description of the situation.
As regards the impact of the international financial and economic crisis, which was also felt by EEX in the financial year 2009, EEX expects that sales will increase again in a small two-digit percentage range. In 2010 EEX will once again increase its staff in order to press ahead with projects for the development of structures and products.
