Successful 2002 for the Atel Group

The Atel Group's strategy of combining production, trading and sales with energy services has proved a successful one, as reflected in the energy company's results for 2002.

Aare-Tessin Ltd. for Electricity (Atel) continued developing its strategy throughout the past year. The key features were the acquisition of power stations in Italy, Hungary and the Czech Republic as well as the development and expansion of sales companies in Poland, France and Greece. The purchase of a trading company in the Czech Republic also helped the company expand its energy trading activities in eastern European countries. The combination of production, trading and sales worked very successfully in 2002, enabling Atel to expand its position in all markets.

Group sales grew to CHF 3.7 billion 2002 was a successful year for Atel, and one in which it reached its set targets and sales figures despite a difficult economic situation. Consolidated sales rose 2.2% to CHF 3.7 billion. Earnings before interest and taxes (EBIT) grew by 14.9% to CHF 255 million and Group profit rose by 3.0% to CHF 170 million. At CHF 490 million, consolidated cash flow was 9.3% lower than the figure for 2001 which was achieved through extraordinary factors. Investments totalled CHF 470 million in 2002. The Board of Directors proposes to pay an unchanged dividend of CHF 20 per share. Production was the highlight of 2002 Atel has been a shareholder in Edipower which is Italy's second-largest energy producer since March 2002. Its energy interest in Edipower is 16.6% which is equivalent to a capacity of around 1,150 MW. In addition to this, Atel began building two gas-combi power stations which have a capacity of 50 and 100 MW respectively. To build up market position in the Central and Eastern Europe region, Atel acquired the Csepel and ECKG power station complexes in Hungary and the Czech Republic. The total capacity of these modern plants in Budapest and Kladno just outside Prague for producing electricity and heat is around 1,000 MW.

Strong growth in energy business The Energy segment exceeded its targets in 2002, with electricity sales up 10.5% to 40 billion kWh. Around three quarters of sales were  foreign transactions, with Italy still Atel's largest sales market. Unlike other energy companies, Atel does not integrate the volume from standard transactions (2002: 47 billion kWh; CHF 1.9 billion) into turnover and sales figures, so turnover simply contains net trading income. Net turnover rose 8% to CHF 2.3 billion due mainly to the expansion of transactions. Earnings in the Energy segment grew 15.3% to CHF 211 million.

Economy affected earnings in the Energy Services segment In the Energy Services segment, the Atel Installation Group in Zurich and GAH Group in Heidelberg suffered as a result of the tough economic situation, more notably in Germany than in Switzerland. Consolidated turnover fell 3.7% to CHF 1.5 billion, while earnings in the Energy Services segment were down 10.3 % at CHF 26 million. The Energy Services segment accounted for around 39% of total consolidated turnover.

Fight against nuclear energy initiatives The outcome of the referenda on 18 May 2003 will be crucial for the Swiss electricity sector and therefore for Atel. Atel owns 40% of Kernkraftwerk Gösgen and 27% of Kernkraftwerk Leibstadt. Abandoning nuclear energy would have negative consequences for both Switzerland and Atel, in that it would jeopardize the country's assured supply, put jobs at risk and make Switzerland more dependent on other countries. This is why Atel is advocating a 'no' vote on both counts in the referendum campaign. Atel regards the 'MoratoriumPlus' initiative as a particularly dangerous and deceptive package.

Outlook After undergoing strong growth in all areas over the past few years, the Group is not planning any large-scale investments for expansion purposes. With the inclusion of the newly acquired companies in Hungary and the Czech Republic, Atel expects to report significantly higher turnover and earnings in 2003.

Aare-Tessin Ltd. for Electricity Corporate Communications