Atel Group in the first six months of 2000

The Aare-Tessin Ltd. for Electricity, Olten (Atel) considerably exceeded its expectations for turnover and profits in the first half of the year and enhanced its position in both the Energy and Energy Service segments. The consolidated net turnover rose by 12% to 1,030 million CHF and Group profits by 36 million CHF to 86 million CHF.

A successful half-year

The Aare-Tessin Ltd. for Electricity, Olten (Atel) considerably exceeded its expectations for turnover and profits in the first half of the year and enhanced its position in both the Energy and Energy Service segments. The consolidated net turnover rose by 12% to 1,030 million CHF and Group profits by 36 million CHF to 86 million CHF.

With its participation in the Frankfurt Power Exchange and in the Scandinavian derivates specialists Energipartner AS, and the joint venture with the municipal power companies in Milan, Rome and Turin, the Atel Group has further strengthened its position in European power trading. Over the first six months of the year the Groups energy sales rose by 13% to 15,652 million kWh. This increase is due primarily to European power trading.

Atel has developed the Energy Services business into its second core element, during the first half of 2000. Atel Installationstechnik has grown with the acquisition of Ascom Installationen AG and the companies Bornet Chevallier SA, Mauerhofer+Zuber SA and Elektro Ehrat AG. With the takeover of the GAH Group in Germany, effective from 1.1.2000, the Energy Services segment is beginning to equal the Energy segment in importance, including turnover. As GAH was taken over in July 2000 with retrospective effect, the company is not included in these half-yearly accounts.

The Atel Groups net turnover over the first six months rose, in comparison with 1999, by 12% to 1,030 million CHF. As a result of changed contract structures in the power trading business, cashflow was reduced by 40 million CHF to 206 million CHF. Group profits rose by 36 million CHF to 86 million CHF, to reach 8.3% of net turnover. It should be borne in mind that the comparison figure for 1999 includes a value adjustment.

Given the seasonal nature of the power business, the results for the second half of the year can hardly be at the same high level as those for the first half. Thanks to the positive course of business in the first six months, we can currently predict that the targets set for the 2000 financial year and profits for 1999 will be exceeded.

The political conditions for electricity companies in Switzerland remain difficult. The National Council did begin debating the Elektrizitätsmarktgesetz (EMG) in the spring. However, owing to the EMGs association with the energy tax proposals, the upper house did not pass the bill in the summer. While legislators in neighbouring countries are creating the conditions required for the opening of their electricity markets, politicians in Switzerland are making heavy weather deregulating the market. Atel considers the rapid opening of the market, a low-cost network organisation compatible with the rest of Europe, and the establishment of the right to supply end customers without discrimination as essential preconditions for guaranteeing power production in the long term, along with the jobs which depend upon it in our country. Atel is also sceptical with regard to the three energy tax proposals which are due to be voted on September 24, 2000, and rejects them. The production and consumption of power are already subject to very high taxes and levies in Switzerland.

Aare-Tessin Ltd. for Electricity Corporate Communications