July 18 (SeeNews) - Austrian wind and hydro electricity company Verbund (VIE:VER) today raised earnings expectations for the current year based on cost savings from restructuring measures and updated resource availability forecast.
Verbund now expects earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR 840 million (USD 928m), up from EUR 750 million previously forecast.
The company also said it will embark on a campaign to reduce costs and increase efficiency which will include cutting 175 jobs by 2020.
The cost savings from restructuring measures, along with higher profit in the Grid segment and improvements in the electricity business are expected to lead to an adjusted net result for 2016 of around EUR 290 million, beating the previous guidance for EUR 230 million.
Verbund will essentially maintain the 2015 cost level until 2019 regarding personnel and other operating expenses. In addition, capital expenditure for growth and maintenance for the 2016–2019 period will be reduced from EUR 1.5 billion to EUR 1.0 billion to improving free cash flow and reduce debt.
The company long-term dividend policy will also be amended. Around 30% of the group result after adjustment for non-recurring effects will be paid out for financial year 2016. The payout ratio for financial year 2017 is expected to be announced in March 2017 during publication of the figures for financial year 2016.
(EUR 1 = USD 1.105)