BKW FMB Energy Ltd Annual Report 2003

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Financial Review Sales and profi t up In the year under review the BKW Group reported a profi t of CHF 252.8 million, representing a year-on-year in crease of 22 percent. Consolidated operating revenue rose 41.6% to CHF 2,945 million, primarily as a result of trading activities as well as national and international sales. 28 Changes in presentation according to IFRS The consolidated fi nancial statements of the BKW Group at 31.12.2003 were once more prepared in accordance with the International Financial Reporting Standards (IFRS). No major changes were made to the accounting principles in 2003. The scope of consolidation changed only slightly in the year under review: the 35% holding acquired in Energie du Jura SA was accounted for using the equity method and the 10% holding acquired in EEF.ENSA (FEW) was accounted for at fair value. Increase in energy sales Total operating revenue for 2003 rose by 41.6% to CHF 2,945 million, largely as a result of a growth of CHF 551 million in trading revenue and of CHF 164 million in international sales, the latter due to higher volumes and price levels. The newly expanded gas business also contributed to this result, posting sales of CHF 63 million compared to CHF 9 million in 2002. Sales in Switzerland rose by CHF 37 million due to a 3.7% (240 GWh) increase in volume caused by a 2.6% rise in consumption by existing customers and through new customer acquisitions. The fi gure is also higher due to the absence of non-recurring customer discounts granted in 2002. Higher operating income and fi nancial result Purchases from partner plants and third parties mainly accounted for the rise in electricity sales, leading to higher expenditure on energy procurement. The rise in operating expenses is also attributable to expenses in connection with the preparation and implementation of the SWX listing and secondary placement of BKW shares, intensive groundwork ahead of the liberalisation of the Swiss electricity market, and further expansion of the international business. The Group nevertheless succeeded in increasing operating income before depreciation and amortisation by 6.8% to CHF 370 million. Similarly, after deducting depreciation and amortisation, which was virtually unchanged at CHF 84.5 million (+1.9%), operating income rose by 8.3% to CHF 285.5 million. In 2003 the fi nancial result benefi ted from exchange rate gains in euros as well as the stock market recovery. On the other hand it was negatively impacted by a decline in income from interest due to less favourable interest rate conditions, coupled with the shift from long-term to short-term time deposits. The positive fi nancial result of CHF 21.7 million (2002: – CHF 17.3 million) signifi cantly contributed to the 22% increase in net profi t for 2003 which, after deductions for taxes and minority interests, amounts to CHF 252.8 million. Growth in balance sheet total Assets and liabilities and shareholders’ equity rose by a good 10% in the year under review. Current assets are primarily responsible for the increase on the assets side. In particular, short-term fi nancial claims rose along with trade accounts receivable, other receivables and inventories. Due to low interest rates, fi nancial assets were primarily invested over the short-term, leading to a marked rise in fi - nancial claims under current assets and an associated reduction in non-current fi - nancial assets. In the fourth quarter of 2003 BKW posted an above-average rise in net sales, resulting in a corresponding increase in trade accounts receivable as well as other receivables. On the liabilities side, equity ratio was slightly up from 44.5 % to 45.7%. The BKW shares acquired from the cantons of Berne and Jura in 2002 and 2003 were mainly used for the cross-participation in EEF.ENSA. Provisions for nuclear waste disposal as well as for onerous contracts related to energy procurement and sales were recorded according to the applicable valuation principles. In the fourth
quarter, short-term liabilities increased as a result of higher income taxes and higher expenses for energy procurement. Lower cash fl ow from operating activities Cash fl ow from operating activities dropped by around CHF 64 million to CHF 217 million, primarily due to an increase in net current assets and settlement of income taxes. The ex pansion in business activities resulted in a CHF 84 million increase in investments in net current assets. In 2002 a divestment in the amount of CHF 52 million was recorded under this item. Before adjusting for changes in net current assets, cash fl ow provided by operating activities rose from CHF 229 million to CHF 301 million. As in the prior-year period, cash fl ow from operating activities was invested primarily in current and non-current fi - nancial assets. Financing activities primarily cover the dividend payment of CHF 35 million (2002: CHF 31 million). Higher dividend proposed Net profi t for the 2003 fi nancial year amounts to CHF 252.8 million (2002: CHF 207.2 million). Based on this result the Board of Directors will propose to the Annual General Meeting on 27 May 2004 a dividend of CHF 10 per share (2002: CHF 6.70 per share) as well as an extraordinary dividend of CHF 5 per share. 29
Page 1 and 2: BKW FMB Energy Ltd Annual Report 20
Page 3 and 4: Contents 2 Foreword Partnerships st
Page 5 and 6: The challenges facing energy policy
Page 7 and 8: Strategy Partnerships and continual
Page 9 and 10: Broad-based production plant Thanks
Page 11 and 12: Board of Directors (at 31.12.2003)
Page 13 and 14: Market Switzerland’s electricity
Page 15 and 16: Energy Policy Clear Federal Court r
Page 17 and 18: Future of nuclear power assured Whi
Page 19 and 20: Production Generating power by part
Page 21 and 22: BKW electricity In the year under r
Page 23 and 24: Trade BKW - a competent and reliabl
Page 25 and 26: Sales Partnership in action - the f
Page 27: Networks Guaranteeing network relia
Page 32 and 33: Consolidated Financial Statements o
Page 38 and 39: 3 Principles of accounting and valu
Page 40 and 41: interest expenses. These are fi nan
Page 42 and 43: 40 8 Financial result CHF (million)
Page 44 and 45: 11 Property, plant and equipment CH
Page 46 and 47: 13 Non-current fi nancial assets CH
Page 48 and 49: 46 16 Accounts receivable CHF (mill
Page 50 and 51: 18 Provisions CHF (million) Nuclear
Page 52 and 53: 50 22 Pension obligations The statu
Page 54 and 55: 52 25 Related parties The following
Page 56 and 57: List of Participations Subsidiaries
Page 58 and 59: Financial Statements of BKW Income
Page 60 and 61: Financial Statements of BKW Notes a
Page 62 and 63: 60 8 Bond issue in 1,000 CHF 31.12.
Page 64 and 65: Report of the Statutory Auditors 62
Page 66 and 67: 64 Appropriation of retained earnin
Page 68 and 69: 66 Signifi cant shareholders In a s
Page 70 and 71: 68 3 Board of Directors Information
Page 72 and 73: 70 AG und Genossenschaft, Jungfraub
Page 74 and 75: 72 - - - - - - - - The Audit Commit
Page 76 and 77: 74 4 Executive Board and Extended E
Page 78 and 79: 76 The members of the Board of Dire
Page 80 and 81:
78 Entries in the shareholder regis
Page 82 and 83:
Addresses BKW Head Offi ce BKW FMB
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BKW FMB Energy Ltd Annual Report 2003

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