DELTA reports lower profit due to severe slowdown in renewable energy sales

The first half of 2009 provided a mixed picture for the company. Although its energy, digital services, infrastructure and grid operations - together accounting for 70% of turnover - remained stable, renewable energy operations saw a sharp fall in demand due to the economic recession, following several years of buoyant growth. Measures have been taken to adjust the organisation and cost base in this business segment to reflect the volume of sales.

Industrial waste operations were also affected by the economic downturn, reduced levels of customer activity leading to a significant decline in the volume of waste offered for processing. Waste processing activities are not expected to recover until the economy picks up again.

Turnover fell slightly by 4% to EUR 996.8m (first half of 2008: EUR 1,033.5m)

The sharp fall in renewable energy sales had a substantial negative impact on gross margin. The decline was, however, more than offset by the effects of the acquisition of a majority interest in waste processing company SAV, an improved procurement strategy, and favourable price effects in the trading portfolio, which boosted gross margin for the first six months. All in all, gross margin improved by EUR 48.7m.

Operating costs increased by EUR 73.8m to EUR 303.2m, due to the consolidation of waste processing company SAV and an intangible asset impairment charge of EUR 15.0m for Solland Solar.

Net profit came to EUR 43.3 million and included a book profit of EUR 9.0 million on the sale of the 150kV and 380 kV high-voltage grids to TenneT. DELTA's capital base remained stable, with a solvency ratio of 39%.

Prospects for the second half of 2009
DELTA's net profit for the first six months was markedly affected by the ongoing economic recession, especially by its impact on the renewable energy market. This situation is unlikely to change in the short term and net profit is expected to continue to fall in the second half of 2009.