In an environment characterised by uncertainty and reserve on the part of the market participants the European Energy Exchange AG (EEX) managed to achieve stable business figures during the first six months of the current year. In spite of the market participants‘ restraint, the continuous promotion of the structural and organisational alignment to customer and market requirements in con- nection with the further expansion of the range of products and services have had a positive effect on the development of the business of EEX Group.
The sales revenue of EEX AG increased by 6 percent to EUR 24.0 million during the reporting period compared with EUR 22.6 million during the same period in the previ- ous year. The Power Derivatives Market, which accounted for EUR 14.9 million of the sales revenue and which was, hence, slightly below the level of the previous year (EUR 15.3 million), was the mainstay of revenue.
The sales revenue from clearing cooperations, including the settlement for the joint subsidiary of EEX and the French Powernext, EPEX Spot SE, which operates the Spot Market for Germany, Austria, France and Switzerland, developed positively. It amounted to EUR 5.4 million as against EUR 4.2 million generated in the previous year. The sales revenue generated in the natural gas segment increased by 7 percent to EUR 0.45 million as against EUR 0.42 million in the same period in 2010, while the revenue on the market for emission rights fell to EUR 0.31 million as against EUR 0.46 million generated during the same period in the previous year. The other sales revenue which essentially includes information products, training courses and annual fees increased by 31 percent to EUR 3.0 million (1st half of 2010: EUR 2.3 million).
The company’s profit situation is stable. Earnings before taxes (EBT) totalled EUR 11.1 million as against EUR 11.5 million generated during the same period in the previous year. “We have invested massively in implementing our growth plans. We have hired new employees, opened offices in London and Brussels and further strengthened our IT infrastructure“, explains Iris Weidinger, Chief Financial Officer of EEX, and points out: “However, we expect that some of these investments will only generate sales over the coming years.” On 30 June 2011, the annual net profit amounted to EUR 9.0 million as against EUR 9.4 million generated in the first half of the year 2010. As of this date, 273 trading participants from 22 countries were admitted to trade on the EEX markets compared with 256 trading participants admitted as of 30 June 2010.
Power Derivatives Market Mainstay of Revenue
In spite of a slight decline in the volume traded to 613 TWh as against 669 TWh in the previous year, the Power Derivatives Market formed the mainstay of revenue during the first half of the year 2011. And the positive development of the volumes traded on the exchange continues: The high share of exchange trading on the Derivatives Market compared with OTC clearing increased from 40 percent in the first half of 2010 to 45 percent today. “The expansion and improvement of the trading participants’ connec- tion to the EEX trading platform were decisive for the increase in exchange trading“, underlines Dr. Christoph Mura, Member of the Management Board and COO of EEX AG, in this context. In contrast to this, at 339 TWh the volume from OTC clearing was lower than in the previous year (403 TWh).
Growth on the Gas Spot Market
The Natural Gas Spot Market developed positively. In the first half of the year 2011, the volume traded short-term increased to 9.1 TWh compared with 6.7 TWh traded in the same period in 2010. On the Natural Gas Derivatives Market the volume traded amounted to 11.4 TWh as against a volume of 17.8 TWh generated during the same period in the previous year. According to Dr. Mura, trading in natural gas has not yet developed sufficiently and is not yet transparent enough in Germany – there is still a lot of work to do. “In order to expand the gas market on the exchange we have developed a comprehensive package of measures: With the European Gas Index (EGIX) we have established a reference price for the gas market and expanded exchange trading with the Dutch TTF market area. With the introduction of 24/7 trading we have adjusted the trading hours to the requirements of the market and the incentive model introduced in August is intended to boost liquidity in trading in natural gas.“
Opposite Trends in Emissions Trading
While the volume of CO2 emission allowances traded on the Derivatives Market in- creased significantly from 35.7 million tonnes in the previous year to 58.6 million ton- nes (14.8 million tonnes of which in the Primary Market Auction), the trade volume on the Spot Market fell from 14.9 million tonnes in the previous year to 9.0 million tonnes this year in a market environment which was uncertain overall.
Outlook remains positive
EEX is confident with regard to the year 2011 as a whole. The London office and the representative office in Brussels will contribute to a strengthening of the presence and market penetration of the European Energy Exchange and to an increase in the liquidity of its trading markets for power, natural gas and emission allowances. In the field of the primary market auction EEX, which has regularly carried out EUA auctions through its platform since the beginning of the year 2010, will submit bids for all future tendering procedures. The clearing business of the subsidiary European Commodity Clearing AG (ECC), which celebrates its 5th anniversary today, will be expanded further. An expanded cross-margining which ECC will introduce in the fourth quarter will signifi- cantly increase the cost benefits for the participants. ”As against the previous year EEX Group expects increasing sales and higher profits for the year 2011“, Peter Reitz, Chief Executive Officer of EEX AG, summarises the expectations for the current financial year.
The European Energy Exchange (EEX) develops, operates and connects secure, liquid and transparent markets. EEX holds 50 percent of the shares in EPEX Spot SE, which operates the Spot Market for Power for Germany, France, Austria and Switzerland. The German and French Derivatives Market for Power is concentrated within EEX Power Derivatives GmbH, a majority-owned subsidiary of EEX with registered offices in Leipzig. Furthermore, EEX offers spot and derivatives trading in natural gas and CO2 emission allowances as well as trading in financial coal futures. EEX Group also includes European Commodity Clearing AG (ECC), the central clearing house for energy and related products in Europe.