109th Annual General Meeting of Atel

The shareholders of Aare-Tessin Ltd. for Electricity (Atel) reflected on a successful 2003 at their 109th Annual General Meeting in Olten. The 525 shareholders who attended the meeting (98,05 % of voting rights) approved the financial statements and voted for a 10% increase in dividend of CHF 22.— per share. CEO Alessandro Sala handed over the energy company’s management reins to Giovanni Leonardi.

1999 was the starting point for the liberalisation of Europe’s electricity markets. Atel revised its strategy at that time to focus even more closely on electricity production, grid and supply in addition to trading and sales and build up a second core business in Energy Services. Its very successful performance in 2003 is proof that this strategy which has now been tested, is the right one. Chairman of the Board of Directors Dr. Walter Bürgi: ‘The key element of our strategy is combining our own production capacity with trading and sales activities.’ Atel has been operating this business model in Switzerland for some years and Bürgi says that it has now been successfully rolled out in Italy, Hungary and the Czech Republic. 

Successful expansion into Central and East European markets Atel took another step in 2003 towards being an active pan-European energy service provider. The Atel Group now generates 86% of its sales outside Switzerland. According to Bürgi, the strategy started to pay off a year ago and judging by 2003’s record results, it has helped the company to go from strength to strength. ‘We sowed the seeds of success through investment and can reap the rewards now and in the future’, concludes Bürgi. Tapping into Central and Eastern European energy markets turned out to be a particularly shrewd move, as there is enormous potential and investment in power stations and trading companies has paid off.

Swiss electricity market in the doldrums Walter Bürgi made no secret of the fact that electricity market liberalisation in Switzerland has been disappointing for him: ‘Numerous hurdles have been put up to prevent the electricity market from functioning efficiently.’ From Atel’s perspective, the key features of the new Electricity Market Ordinance are unsatisfactory. Atel’s view has been clear and unwavering for years, i.e. full market opening all the way down to the power socket. Atel is also in favour of a Swiss grid operating company run on a private commercial basis while retaining grid ownership. ‘An open electricity market in Switzerland may be a long way off’, says Bürgi.

Group turnover for 2003 grew to CHF 5.3 billion In his 2003 review, CEO Alessandro Sala reported yet more spectacular growth. Net consolidated turnover rose 43% to CHF 5.3 billion, consolidated profit grew by 60% to CHF 272 million and electricity sales climbed by 71% to 68 TWh. ‘We have been successfully working on the energy market for the past five years, investing extensively and heavily expanding our operations,’ he said. Alessandro Sala, the 64-year-old from Ticino who has headed the Atel Group since 1999, stood down at the Annual General Meeting for reasons of age.

Consolidation in 2004 After strong external growth in 2003, the main focus of 2004 will be strengthening funding power and balance sheet structures. Barring any exceptional events, Atel expects net turnover and operating results to rise at around the same levels as in 2003 throughout the Group.

Aare-Tessin Ltd. for Electricity Corporate Communications