A balance sheet profit of EUR 1.1 million is the result of the 2006 financial year for Stadtwerke Gießen AG (SWG). Together with the Chairman of the Supervisory Board of the AG, Dr. Volker Kölb, the two members of the company's Management Board, Manfred Siekmann and Reinhard Paul, expressed their satisfaction with this result at the annual press conference on 22 August: "We are pleased that we were able to achieve a good result and even slightly exceed our expectations despite the difficult underlying conditions. So although 2006 was a challenging year for us, it was also a successful one," said Manfred Siekmann, CEO of SWG.
Among the challenges Siekmann cites the pressure on sales revenues from the regulation of grid utilisation fees, the unbundling provisions of the Energy Industry Act, the dispute over the re-granting of local transport concessions in Giessen and the broad public debate about rising energy costs.
SWG Group also successful
The net profit for the SWG Group, which in addition to the parent company Stadtwerke Gießen AG and the former subsidiaries Heizkraftwerk Gießen GmbH, MIT.BUS GmbH and Elektrizitätswerk Hammermühle (EWH) Versorgungs GmbH has also included the newly founded grid subsidiary Mittelhessen Netz GmbH (MIT.N GmbH) since 2006, amounts to Euro 1.4 million.
Appropriation of profits
As in the previous year, EUR 1.0 million of SWG's distributable profit totalling EUR 1,133,513.66 will be paid out as a dividend to the City of Giessen as the sole shareholder of SWG. Dr Volker Kölb, Chairman of the SWG Supervisory Board, was delighted: "This means that the money stays in the region and benefits the people here." 100,000 euros will be allocated to retained earnings and the remaining 33,513.66 euros will be carried forward to new account.
Result mainly characterised by higher purchase prices
The price-driving trend on the energy procurement markets continued in 2006. As a result, not only did private households have to pay significantly more for their energy consumption, but energy procurement costs for SWG also increased significantly once again. This development is clearly reflected in SWG's sales figures and cost of materials. On the one hand, SWG's sales revenue excluding electricity and gas tax rose by 30.8 % to EUR 244 million. On the other hand, the cost of purchased goods, raw materials and supplies rose by 63% to EUR 186.2 million.
Special projects in 2006
- Buses can now also fill up with natural gas
Natural gas as a fuel is environmentally friendly and cost-effective. An ideal combination not only for cars: natural gas is also an ideal fuel for local public transport. Reason enough for SWG to create a natural gas refuelling facility for buses and trucks in Giessen. This filling station went into operation on 29 June 2006. At the same time, SWG's local transport subsidiary MIT.BUS GmbH purchased five new natural gas articulated buses in 2006. Compared to their diesel-powered "colleagues", these buses emit significantly less nitrogen oxide, carbon monoxide, hydrocarbons and particulate matter. The natural gas buses have another decisive advantage in urban transport: they are noticeably quieter.
- Local transport remains the responsibility of SWG
In May 2007, SWG received authorisation from the Giessen Regional Council to operate the Giessen city bus service for a further eight years. Manfred Siekmann: "We are looking forward to this task, which we will fulfil with great commitment together with our subsidiary MIT.BUS GmbH." However, until the decision of the regional council has become legally incontestable, SWG will have to continue to provide the transport service on the basis of a temporary licence.
- Renovation of the Queckborn waterworks
In 2006, SWG made its traditional Queckborn waterworks fit for the future. The waterworks was practically completely refurbished in just eight months - and this was done during ongoing operations.
- 150 years of gas supply in Giessen
In 2006, SWG used the anniversary "150 years of gas supply in Giessen" as an opportunity to show its customers in a series of events the wide range of applications that natural gas offers today. One highlight was certainly the football match between Borussia Dortmund and the SWG district team, which was watched by 6,000 enthusiastic spectators in Giessen's Waldstadion. The series of events concluded with the "SWG Winter Lights", a big anniversary day for the whole family on 9 December 2006 in the Hessenhallen. SWG CEO Reinhard Paul: "The anniversary in particular ensured that I will remember 2006 as a year of many positive encounters. I would like to thank all our customers once again for celebrating "150 years of gas supply in Giessen" with us." "Our thanks also go, of course, to all our employees, who have done a tremendous job this year, and to all the companies in the region who work side by side with us to fulfil the many tasks of a municipal company," adds Siekmann.
Outlook for 2007/2008
In 2006, the expected reductions in electricity and gas grid usage fees did not materialise, as the Federal Network Agency for electricity and the Hessian Regulatory Authority for gas did not approve the grid fee applications submitted in October 2005 (electricity) and on 31 January 2006 (gas) in 2006. Nevertheless, the reductions in grid utilisation fees accepted by the Hessian Ministry of Economics took effect in the electricity residential customer segment.
We have now received a legally valid decision from the Federal Network Agency. It provides for a retroactive reduction in grid usage fees of 11.39 % as of 1 June 2007. For the gas sector, we expect - after appropriate negotiations - a decision that provides for a 13.2 % reduction in grid usage fees from 1 September or 1 October 2007.
In addition, the second grid utilisation fee for electricity and gas will be set for 2008. As a result of this decision, SWG expects a slight increase in grid utilisation fees for both electricity and gas.
Giessen currently occupies a top position in terms of security of supply. On average, the grid area of SWG subsidiary Mittelhessen Netz GmbH only experiences power outages for 11.55 minutes per year (in comparison: the German average is 30 minutes). In other European countries, the average outage time is even longer (e.g. France 57 minutes, Great Britain 87 minutes and Spain even 124 minutes per year).
SWG CEO Manfred Siekmann: "We believe that security of supply is more important for private and especially industrial customers than the last euro saved. We will therefore do everything we can to maintain the highest possible level of supply security."
Manfred Siekmann continued: "In recent years, we have not only implemented the necessary restructuring measures in terms of unbundling, but have also used this as an opportunity to reorganise some parts of our company more effectively. We will continue along this path in order to increase the productivity of our company. In 2007, we expect a positive operating result despite lower sales of gas, district heating and night-time electricity due to the weather."