Outlook

Energie AG's economic environment will continue to be influenced by the COVID-19 pandemic in the second half of the 2020/2021 fiscal year, despite the anticipated easing of the situation. In addition to this, the general energy and climate policy conditions will pose a material challenge. In particular, the detailed elaboration of the Renewable Energy Expansion Act and the Energy Efficiency Act in Austria will have a significant impact on the entire industry and the future positioning of the Group as an energy service provider. Corresponding strategic and operational measures for the rapid implementation of the legal requirements were prepared at an early stage throughout the Group.

With a view to the development on the international energy markets, the current high price level for electricity and gas seems to be consolidated due to the current overall situation, which is characterised by easing of the COVID-19 situation in Europe, new emission reduction targets and a high global LNG (Liquefied Natural Gas) demand with low gas storage levels. Volatility remains high and a further increase cannot be ruled out.

Vertrieb GmbH has extended the price guarantee until 1 January 2022. Both the electricity and natural gas end-customer prices for private and business customers in the premium sector, with the exception of the flexible “Float” electricity price model, and the prices for internet customers will remain unchanged.

The general regulatory conditions for the Grid Segment for the fiscal year can continue to be assessed as stable. The new regulatory periods start in 2023 for natural gas and in 2024 for electricity; detailed cost audits will be carried out by the regulatory authority in the next two fiscal years. The general conditions surrounding COVID-19 continue to make it difficult to implement measures for the construction and maintenance of grid facilities and customer requirements. Despite these circumstances, the expansion and maintenance of the grids will continue as planned in order to be able to continue to offer customers stable and reliable supply grids. The amendments envisaged in the Renewable Energy Expansion Act package will also have a considerable impact on the scope and sequence of processes at Netz OÖ GmbH and present a major challenge. The second half of the 2020/2021 fiscal year will therefore also mainly be characterised in this Segment by preparations for the implementation of the new regulations.

In the area of smart meters, the first phase of the Smart Meter Upgrade project was launched at the beginning of the first half of 2020/2021 and is expected to run until 2027. The aim of the project is to expand the smart meter system to meet future requirements such as supporting citizens' energy communities and renewable energy communities.

In the second half of 2020/2021, the focus in Telekom GmbH's fibre-optic sector will continue to be on the further expansion of the network infrastructure.

In the Czech Republic Segment, it is important to examine EU funding programmes in the area of energy efficiency, and to develop projects, taking into account the upcoming energy transition in the Czech Republic with the phasing out of coal as an energy source and the resulting opportunities for an updated climate policy. In parallel, digitalisation projects planned with communities, for example in the field of digital water meters and smart grid in the water sector, are being implemented in the second half of the 2020/2021 fiscal year. At the end of the reporting period, it is still difficult to assess the impact of the on-going development of the COVID-19 pandemic, especially on the Services unit.

Lower throughputs are expected for the waste management sector thermal plants at the Wels and Lenzing sites also in the second half of the fiscal year due to the increased calorific value of waste. At the Wels site, the plan is to complete the conversion project in the scope of relocating company headquarters and to intensively continue the “District heating extraction from WAV” project. The inspection intervals of incineration lines 1 and 2 will be changed in this context. Pandemic-related declines in business at individual locations are still expected in the second half of the fiscal year, especially where there are stronger ties to tourism operations. In general, however, business is expected to remain strong in the coming months.

Energie AG's focus in the second half of the 2020/2021 fiscal year will again continue to be on reliable performance of system-critical tasks, especially guaranteeing security of supply for customers, while at the same time ensuring the highest possible levels of health protection for the workforce, customers and business partners. Furthermore, for the period following the lifting of statutory COVID-19 restrictions, all precautions will be taken to return to the established processes as quickly and safely as possible. The strategic goals in the areas of customer orientation, environmental protection, decarbonisation, digitalisation and cost management will remain unchanged.

Effects attributable to the COVID-19 pandemic, for example, due to the payment default on the part of business partners, can also be expected in the second half of the 2020/2021 fiscal year. Assuming a rapid economic recovery, earnings for the complete 2020/2021 fiscal year are expected to remain at approximately the previous year's level.

Linz, 28 May 2021

The Management Board of Energie AG Oberösterreich