Because of electricity prices
BKW makes a leap in profits
According to its own statements, the energy group BKW can look back on a successful year 2022. The company announced that the sharp rise in electricity prices and the sometimes extreme upheavals on the energy markets had a positive impact on the result.
BKW expects an operating profit (EBIT) in the region of CHF 1 billion for 2022, which would more than double the previous year’s CHF 395 million. In September, the company had announced an EBIT in the range of 460 to 500 million. In addition, the medium-term goal is an EBIT of around CHF 800 million, which is also exceeded.
The massive upheavals on the energy markets were major challenges, but also led to opportunities in managing the energy position of its own power plants, the company wrote in the past financial year. With the purpose of securing one’s own energy positions, the strong price fluctuations were optimally used in management.
This, together with the ancillary services supplied at higher prices, led to an extraordinary trading result for BKW in the fourth quarter. Because the value of the ancillary services that were provided to maintain grid stability has increased significantly thanks to the high electricity prices.
Irrespective of this performance in the management of the energy positions, the company believes that it has weathered the market turbulence well so far. The risks associated with the energy crisis would also be constantly monitored.
The security deposits required by the stock exchange were deposited at all times, so it was never necessary to apply for government support measures.
The approximately 300,000 households in BKW’s basic supply are not affected by the upheavals on the energy markets because they receive their electricity at tariffs based on production costs from BKW’s own production. According to BKW, major customers who procured their electricity for 2023 before the crisis were also not affected.
On the other hand, large customers without insurance are confronted with higher procurement costs. According to the electricity company, these are a consequence of the international market development and are not caused by its own trading business.
Thanks to the extraordinary result, BKW intends to significantly increase its investments in the expansion of renewable energies in Switzerland.
The definitive annual results will be published on March 14, 2023.