2006 Annual Report
E.ON Ruhrgas International AG
At Home in Europe
E.ON Ruhrgas International AG
At Home in Europe
Steady growth
in Europe is the strategic goal to which the activities of E.ON Ruhrgas International AG
are geared within the Pan-European Gas market unit led by E.ON Ruhrgas AG. This goal
is being achieved by systematically integrating the affiliates into the E.ON Group as well
as by increasing the percentage interests in affiliates and making new acquisitions.
Joint commitment
dominates daily work at E.ON Ruhrgas International AG. Over half the employees of
the company work locally at the affiliates. There they develop the business further
alongside their local colleagues and with the strong support of the team at the Essen
head office.
Assuming responsibility for progress
E.ON Ruhrgas International AG pools the contributions of all those involved and uses
them in the spirit of best practice to gear its entire business to the customers and the
market and to establish optimal structures and workflows.
Using our energy and experience
E.ON Ruhrgas International AG continued its successful course in the year under review.
The networking of all national units and the exploitation of pan-European synergies
in the gas and electricity sectors are making a significant contribution to creating value
within the E.ON Group.
Report on the 2006 Financial Year
Contents
02
Map of Europe – Affiliates
04
Boards
05
Statement of the Supervisory Board
07
The 2006 Business Year of E.ON Ruhrgas International AG
10
Romania: E.ON Gaz România – Forging Ahead with Integration
into the E.ON Group
12
Hungary: E.ON Földgáz – An Integral Part of Pan-European Gas
14
Affiliates
14
15
19
31
34
36
37
Profile of the International Affiliates
Baltic States
15
Estonia
16
Latvia
17
Lithuania
Central and South-Eastern Europe
19
Poland
21
Romania
24 Slovakia
26 Slovenia
27
Czech Republic
29 Hungary
Scandinavia
31
Finland
32 Norway
33 Sweden
Western Europe
34 Luxembourg
35 Switzerland
Profile of the National Affiliates
Germany
42
Best Practice in Romania
44
Profile of the Shareholdings Development, Legal Affairs and Shareholdings Controlling Departments of E.ON Ruhrgas International AG
46
Financial Statements
01
GASUM Espoo
EESTI GAAS Tallinn
GASNOR Karmoy
SWEDEGAS Gothenburg
LATVIJAS GĀZE Riga
MPP Mazeikiai
LIETUVOS DUJOS
RST Vilnius
THERMINVEST Gdansk
SEC Szczecin
IRB Warsaw
EVG Erfurt
EEX Leipzig
SOTEG Luxembourg
GAS-UNION Frankfurt am Main
SPP BOHEMIA Prague
SFG Saarbrücken
FGN Nuremberg
MND Hodonín
NAFTA Gbely
SPP Bratislava
E.ON FÖLDGÁZ Budapest
PANRUSGÁZ Budapest
HOLDIGAZ Vevey
GEOPLIN Ljubljana
CCNE Cluj-Napoca
EGR Târgu Mures
Affiliates
03
INTERNATIONAL
BALTIC STATES
Estonia
Latvia
Lithuania
EESTI GAAS AS Eesti Gaas, Tallinn
- JSC Latvijas Gaze,
LATVIJAS GAZE
Riga
LIETUVOS DUJOS AB Lietuvos Dujos, Vilnius
MPP 1 AB Mazeikiu Elektrine, Mazeikiai
RST AB Rytu Skirstomieji Tinklai, Vilnius
CENTRAL AND SOUTH-EASTERN EUROPE
, Energetyczna Sp. z o.o.,
Poland
IRB Inwestycyjna Spó lka
Warsaw
SEC 2 Szczecińska Energetyka Cieplna Sp. z o.o.,
Szczecin
, z o.o., Gdansk
THERMINVEST 3 therminvest Spó lka
Romania
CCNE Colonia Cluj-Napoca Energie S.R.L., Cluj-Napoca
CONGAZ S.C. Congaz S.A., Constanta
EGR 4 E.ON Gaz România S.A., Târgu Mures
Slovakia
NAFTA Nafta a.s., Gbely
SPP 5 Slovensk ý plynárensk ý priemysel a.s., Bratislava
GEOPLIN6 Geoplin d.o.o., Ljubljana
Slovenia
MND7 Moravské naftové doly a.s., Hodonín
Czech Republic
SPP BOHEMIA8 SPP Bohemia a.s., Prague
E.ON FÖLDGÁZ 9
Hungary
E.ON Földgáz Storage Zrt., Budapest
E.ON Földgáz Trade Zrt., Budapest
PANRUSGÁZ Panrusgáz Zrt., Budapest
Vilnius
SCANDINAVIA
Finland
Norway
Sweden
WESTERN EUROPE
Luxembourg
Switzerland
15
16
17
18
19
20
21
22
23
25
25
26
28
28
30
GASUM Gasum Oy, Espoo
GASNOR Gasnor AS, Karmoy
SWEDEGAS10 Swedegas AB
(formerly Nova Naturgas AB), Gothenburg
31
32
SOTEG Société de Transport de Gaz S.A., Luxembourg
HOLDIGAZ Holdigaz SA, Vevey
34
35
EEX European Energy Exchange AG, Leipzig
EVG11 Erdgasversorgungsgesellschaft
Thüringen-Sachsen mbH (EVG), Erfurt
FGN12 Ferngas Nordbayern GmbH, Nuremberg
GAS-UNION12 Gas-Union GmbH, Frankfurt am Main
SFG12 Saar Ferngas AG, Saarbrücken
38
33
NATIONAL
Germany
CONGAZ Constanta
38
39
39
40
Affiliates of E.ON Ruhrgas International AG
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
Sold after merger with Mazeikiu Nafta
Sold to E.DIS energia Sp. z o.o., Poznań/Poland, with effect from 1 January 2007
Sold to E.DIS energia Sp. z o.o., Poznań/Poland, with effect from 11 December 2006
Acquisition by E.ON Ruhrgas AG, Essen; transfer to E.ON Ruhrgas International AG, Essen, and in the next step
transfer to the newly established E.ON Gaz România Holding S.R.L., Târgu Mures/Romania, in preparation
Through E.ON Ruhrgas Mittel- und Osteuropa GmbH, Essen, Slovak Gas Holding B.V., Zoetermeer/Netherlands
Through Ekopur d.o.o., Ljubljana/Slovenia
Through EUROPGAS a.s., Prague/Czech Republic, and SPP Bohemia a.s., Prague/Czech Republic
Through EUROPGAS a.s., Prague/Czech Republic, and SPP a.s., Bratislava/Slovakia
0.15 % interest in E.ON Földgáz Storage Zrt., Budapest/Hungary, and 0.02 % interest in E.ON Földgáz Trade Zrt.,
Budapest/Hungary, are each held by RGE Holding GmbH, Essen. (RGE Holding GmbH is a wholly-owned subsidiary
of E.ON Ruhrgas International AG, Essen)
Renamed in 2007
Through E.ON Ruhrgas AG, Essen; looked after by E.ON Ruhrgas International AG, Essen
Through RGE Holding GmbH, Essen
04
Boards
Members of the Supervisory Board
Dr Burckhard Bergmann
Chairman
until 8 May 2006
Chairman of the Board of Management of E.ON Ruhrgas AG, Essen
Member of the Board of Management of E.ON AG, Düsseldorf
Dr Friedrich Janssen
Vice-Chairman until 8 May 2006
Chairman since 8 May 2006
Member of the Board of Management of E.ON Ruhrgas AG, Essen
Dr Michael Pfingsten
Vice-Chairman until 31 December 2006
Member of the Board of Management of E.ON Ruhrgas AG, Essen
(until 31 December 2006)
Christoph Dänzer-Vanotti
until 30 November 2006
Member of the Board of Management of E.ON AG, Düsseldorf
Armin Geiss
since 1 December 2006
Member of the Board of Management of E.ON Ruhrgas AG, Essen
Dr Jürgen Lenz
since 8 May 2006
Member of the Board of Management of E.ON Ruhrgas AG, Essen
Dr Bernhard Reutersberg
since 1 January 2007
Member of the Board of Management of E.ON Ruhrgas AG, Essen
Dr Jochen Weise
since 4 July 2006
Member of the Board of Management of E.ON Ruhrgas AG, Essen
Board of Management
Dr Ulrich Schöler
Essen
Chairman
Stephan Kamphues
Essen
Jürgen Schneider
Mülheim an der Ruhr
Statement of the Supervisory Board
Statement of the Supervisory Board
The Supervisory Board was regularly informed about the situation and development
of the company during the 2006 financial year and supervised the management of the
company. It received and discussed verbal and written reports from the Board of
Management. Furthermore, the Chairman of the Supervisory Board was continuously
informed about major developments and forthcoming decisions. All measures requiring
the approval of the Supervisory Board were discussed in detail. The Supervisory Board
examined the progress of business, the result situation and the financial position of the
company and its major affiliates as well as the company’s early risk detection system.
The Supervisory Board approved the financial investments and tangible assets spending
plan presented individually by the Board of Management and took due note of the
financial plan.
The auditors, PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Essen, audited the financial statements for the year ended 31 December 2006
in accordance with the German Commercial Code (HGB) as well as the accounting
records with special emphasis on the early risk detection system and issued an unqualified auditors’ report for the financial statements for the year ended 31 December 2006.
The audit showed that the Board of Management has the kind of early risk detection
system required by Section 91, para. 2 of the German Companies Act (AktG) and that the
system is suitable for recognising developments at an early stage which might jeopardise the continued existence of the company. The Supervisory Board took due note of the
result of the audit.
The Supervisory Board thoroughly examined the financial statements in accordance
with the German Commercial Code (HGB). After this thorough examination, the Supervisory Board raises no objection to the financial statements. It has approved the financial
statements prepared by the Board of Management for the year ended 31 December 2006,
which are therefore ratified.
The Chairman of the Supervisory Board, Dr Burckhard Bergmann, laid down his mandate with effect from 8 May 2006. The Vice-Chairman, Dr Friedrich Janssen, was elected
Chairman with effect from the same date.
The Vice-Chairman of the Supervisory Board, Dr Michael Pfingsten, vacated his seat
with effect from 31 December 2006.
The Supervisory Board and Board of Management would like to thank Dr Burckhard
Bergmann and Dr Michael Pfingsten for their great commitment which made a major
contribution to the successful development of the company.
Christoph Dänzer-Vanotti left the Supervisory Board with effect from 30 November
2006 after only serving on the Board for a short time in order to take up new responsibilities as a member of the Board of Management of E.ON AG, Düsseldorf.
The following members of the Board of Management of E.ON Ruhrgas AG were
elected to the Supervisory Board: Dr Jürgen Lenz with effect from 8 May 2006, Dr Jochen
Weise with effect from 4 July 2006, Armin Geiss with effect from 1 December 2006 and
Dr Bernhard Reutersberg with effect from 1 January 2007.
The Supervisory Board wishes to express its thanks and recognition to the Board of
Management and to all staff for their work in the 2006 business year.
Essen, April 2007
The Supervisory Board
Dr Friedrich Janssen, Chairman
05
Steady growth
through acquisitions and integration
The 2006 Business Year of E.ON Ruhrgas International AG
The 2006 Business Year of E.ON Ruhrgas International AG
Europe is growing together. At the same time, the European Union has now been enlarged through the
accession of the new member states, Bulgaria and Romania, on 1 January 2007. The daily work of E.ON Ruhrgas
International AG, Essen, is also dominated by the expansion of its international activities. Over half of the
employees of E.ON Ruhrgas International AG now work at the affiliates, developing business there alongside
their local colleagues and with the strong support of the Essen team. A wide range of different issues are
discussed in the project teams and bodies. E.ON Ruhrgas International AG puts all these ideas together and uses
them in the spirit of best practice to gear its entire business to the customers and the market and to establish
optimal structures and workflows. E.ON Ruhrgas International AG is at home in Europe.
E.ON Ruhrgas International AG is a business unit of
the Pan-European Gas market unit led by E.ON
Ruhrgas, which is in turn part of the E.ON Group. E.ON
Ruhrgas International’s strategy is geared to further
growth in Europe. This goal is pursued by increasing
the company’s percentage interests in affiliates as
well as by making new acquisitions and systematically
developing existing affiliates. A key factor in the sustained increase in the market value of the foreign
affiliates is the systematic integration of these companies into the E.ON Group by networking all national
units to exploit pan-European synergies in the gas and
electricity market sectors. This makes a significant
contribution to creating value within the E.ON Group.
In 2006, E.ON Ruhrgas International AG continued
its strategy of growth by making further acquisitions.
Moreover, the company pushed ahead with the integration of its affiliates into the Group structure. One
focus here was the assumption of responsibility for
gas supplies in Romania and Hungary by our affiliates.
E.ON Ruhrgas International AG has committed itself
to providing customers in the whole of Hungary and a
large part of Romania with secure, reliable gas supplies. A vital element of this commitment was the
takeover of the gas trading and storage businesses of
the Hungarian oil and gas company, MOL, in spring
2006. The companies fully acquired by E.ON Ruhrgas
International AG were renamed E.ON Földgáz Trade
Zrt. and E.ON Földgáz Storage Zrt. in the middle of
the year. With the support of their colleagues in Essen,
E.ON Ruhrgas International staff have since been
managing the two companies locally.
Another focus in 2006 was the restructuring of
E.ON Gaz România, formerly Distrigaz Nord, which
was acquired in 2005. E.ON Gaz România is one of the
two big Romanian gas suppliers. A new organisational
structure was introduced on 1 January 2006 and efficiency-enhancing and modernisation measures were
continued. The shareholding acquired by E.ON Ruhrgas
is now being controlled and further developed by
E.ON Ruhrgas International AG; it is to be transferred
to E.ON Ruhrgas International AG in the near future.
Furthermore, the company was renamed E.ON Gaz
România S.A. with effect from 1 April 2006, thus making its integration into the E.ON Group evident to the
general public.
At the beginning of July 2006, the Group’s portfolio
of affiliates in Scandinavia, the Baltic states, northern
and western Europe as well as central and southeastern Europe was supplemented by shareholdings in
two Lithuanian electricity companies transferred from
E.ON Energie AG, Munich. These two shareholdings
were a 20.28 % interest in the electricity utility, AB Rytu
Skirstomieji Tinklai, and a 10.9 % interest in the power
station, AB Mazeikiu Elektrine. At the beginning of
2007, AB Mazeikiu Elektrine was merged with the parent company, Mazeikiu Nafta. The resultant 0.15 %
interest of E.ON Ruhrgas International AG in Mazeikiu
Nafta has since been sold as part of a squeeze-out.
Thus, in addition to its gas affiliates, E.ON Ruhrgas
International AG has focused its responsibility on the
Baltic power distribution activities.
07
08
The 2006 Business Year of E.ON Ruhrgas International AG
E.ON Ruhrgas
interest: 100 %
In 2006, the company’s financial investments
totalled ¤ 789 million.
As part of the E.ON Ruhrgas Group, E.ON Ruhrgas
International AG is exposed to various risks and
opportunities in its national and international business activities. These risks and opportunities are inextricably linked with the entrepreneurial action taken
by the various business units. The opportunities and
risks in 2006 were mainly connected with the different
national regulatory systems and their development.
The requirements imposed by the national regulatory
authorities make it necessary to develop specially
tailored organisational solutions. One example is the
different unbundling requirements in the respective
European countries.
In Slovakia, Slovensk ý plynárensk ý priemysel a.s.
(SPP), Bratislava, was legally unbundled in 2006. As
part of this process, the transit and distribution businesses were hived off into two wholly-owned subsidiaries (SPP preprava a.s. and SPP distribucia a.s.).
SPP preprava a.s. moves natural gas through the highpressure pipeline system from the Ukrainian to the
Czech/Austrian border. By contrast, SPP distribucia a.s.
takes the gas from the transit system and distributes
it to the gas consumers in Slovakia. The trading business and the central services have, however, remained
with the parent company SPP.
In Germany, Saar Ferngas AG, Saarbrücken, and
Gas-Union GmbH, Frankfurt am Main, established
their own transmission companies on 1 January 2005
and 1 January 2006 respectively in compliance with the
legal unbundling requirements. Ferngas Nordbayern
GmbH, Nuremberg, will not establish its own transmission company as part of unbundling but will lease
its pipeline system to a project company of E.ON
Gastransport AG & Co. KG, Essen, which is yet to be
established.
Furthermore, Gas-Union GmbH, Ferngas Nordbayern GmbH and Saar Ferngas AG all managed to
improve their earnings situation in 2006 despite tough
gas-to-gas competition and stricter legal requirements. The higher earnings were attributable to the
very cold weather at the beginning of 2006, which
boosted the earnings of all distribution companies.
Overall, the legal and economic environment in
the energy industry is changing fast. This situation
is creating both opportunities and risks. E.ON Ruhrgas
International AG is handling these risks and opportunities with the aid of a comprehensive risk management system which is an integral part of the company’s business and decision-making processes. Potential
risks are identified at an early stage, evaluated and
documented in detail so that suitable precautionary
and control measures can be taken. At the same time,
opportunities are systematically exploited with a view
to identifying earnings potential capable of achieving
a sustained increase in the company’s value. This enables the company to attain its medium-term financial
targets and safeguard the long-term existence of the
company.
The earnings situation of E.ON Ruhrgas International AG can be regarded as stable, mainly thanks to
the rising income from participating interests. Now
that the restructuring process has been completed,
which involved the transfer of a large number of
German shareholdings in utilities as well as foreign
shareholdings in the Czech Republic, Hungary and
Poland within the E.ON Group, the focus is on extending involvement in Europe.
E.ON Ruhrgas International AG, Essen
2005
2006
Share capital
¤m
156
156
Equity
¤m
1,935
1,935
Capital expenditure
¤m
1
789
Income from participating interests (incl. PLTA*)
¤m
180
187
58
66
Employees
* Income from profit-and-loss transfer agreements
Joint commitment
for competitive companies
10
Romania
Romania
E.ON Gaz România – Forging Ahead with Integration
into the E.ON Group
The integration of E.ON Gaz România into the E.ON
Group is an ongoing process that is being lived out in
practice.
At E.ON Gaz România, living integration means
that the some 8,000 Romanian colleagues and the
staff of E.ON Ruhrgas International and E.ON Ruhrgas
work hand in hand both locally and in Essen. The aim
is to fulfil E.ON Ruhrgas International’s core task, the
further development of the affiliates, as completely
as possible. This includes assuming responsibility
for people through active partnerships, supporting our
partners in any questions they may have as well
as helping them to master all challenges and seize all
opportunities which the international markets present. This approach is illustrated by the clear division
of responsibilities and cooperation between Dr Achim
Saul, E.ON Ruhrgas International AG, and Virgil Metea
(top row, fourth photo from the left), Deputy DirectorGeneral of E.ON Gaz România, who has already been
working at E.ON Gaz România for several years. This
cooperation is driven by the awareness that it is
necessary to look beyond one’s own back yard. Only if
people are prepared to think beyond their national
borders can the continuous competitive requirements
be met and the company advance further.
German and Romanian staff are working together
on achieving optimum development in other fields,
too. Dan Morari, for example, (top row, first photo on
the left, first on the left) is Head of Distribution. Here
there has been a particularly large amount of work
to be done on modernising the distribution network
as part of the company’s step-by-step integration into
the E.ON Group. These measures permit E.ON Gaz
România to successfully meet the challenges of the
increasingly competitive Romanian gas market and
to comply with the regulation requirements.
Jutta Krämer (top row, fifth photo from the left)
is Head of General Services, which includes responsibility for the administration of buildings, land and the
management of the vehicle fleet. This division is particularly important for the physical implementation of
the unbundling concept as it makes sure that office
space is available. Claudia Badiu (top row, third photo
from the left, first on the right) is the Head of Marketing. In 2006, one of the outstanding events handled
by her team was the entire rebranding process surrounding the changing of the company’s name from
Distrigaz Nord to E.ON Gaz România on 1 April 2006.
The new name now also demonstrates the company’s
membership of the E.ON Group to the general public.
The success of the integration work so far is also
reflected in the good results of the first employee
opinion survey. With 92.6 % of the employees taking
part, the participation rate was higher than average.
Romania
Identification with and commitment to OneE.ON
are also extremely high. This underlines the successful
implementation of the OneE.ON concept which was
only possible thanks to the great commitment and
willingness of our roughly 8,000 colleagues in Romania
to accept change.
Thomas Jung (bottom row, first photo on the left)
is Head of Gas Purchasing. Cooperation with our
parent company, E.ON Ruhrgas, is particularly intensive
in this area. Here the long-standing relations with
various gas producers are especially helpful. This transfer of know-how and support ensure that the customers in the company’s supply territory receive their
gas from reliable sources. Thomas Jung travels a lot
between Essen and Târgu Mures on this mission.
Manuela Witt (top row, first photo, centre), Head of
Planning and Reporting, works in this function closely
with the shareholdings controllers at E.ON Ruhrgas
International AG, Martin Kersten (bottom row, fourth
photo from the left) and Lukas Specht (bottom row,
first photo on the right). The Shareholdings Controlling
department in Essen gathers the data from the company and prepares them for reports within the Group.
All the different inquiries and tasks – whether
from the German or Romanian side – land on Anke
Weber’s desk (bottom row, fourth photo from the left) –
a shareholdings developer at E.ON Ruhrgas International AG, whose responsibilities include Romania.
Katja Palnau (bottom row, third photo from the left)
Romania
from the Legal Affairs department of E.ON Ruhrgas
International AG also plays an important role here. She
deals with many Romania-specific legal issues directly
and in close consultation with the Legal Affairs department of E.ON Gaz România. Cross-border projects are
also the order of the day. With all the many fields of
activity, it is crucial for the Board member responsible
to be given optimal support.
The team members work closely together, thus
permitting the best possible workflow – regardless of
location. For example, Romanian colleagues regularly
come to E.ON Ruhrgas International in Essen for several
weeks where they share professional and issue-related
knowledge in the interest of E.ON Gaz România’s
integration into the E.ON Group.
11
12
Hungary
Hungary
E.ON Földgáz – An Integral Part of Pan-European Gas
E.ON Ruhrgas was already a well-known name in the
Hungarian gas industry when the contract on the
purchase of the two companies, MOL WMT (gas trading) and MOL Storage (gas storage), was signed in
Budapest by MOL of Hungary and E.ON Ruhrgas International AG on 4 November 2004.
E.ON Ruhrgas International has been active in
Hungary for more than ten years and has played a
major role in shaping the development of the Hungarian gas industry in the last decade with the acquisition
of shareholdings in two major Hungarian gas supply
companies (DDGÁZ and FÖGÁZ). It is also ten years
since E.ON Ruhrgas – as part of the diversification of
its sales – commenced gas deliveries to Hungary. This
made an important contribution to security of supply
in Hungary.
The takeover of the former MOL companies,
MOL WMT and MOL Storage, on 31 March 2006 opened
up new business opportunities. However, it also
caused some uncertainty among the employees of the
gas trading and storage companies. For this reason
E.ON Ruhrgas AG sent a team to Hungary to work with
their Hungarian colleagues on the development of
a targeted change management concept tailored to
the company’s needs. For example, trust-building integration workshops took place both prior to and immediately after the official takeover of the shares on
31 March 2006. When renaming the companies, names
were deliberately chosen to reflect both the Hunga-
rian identity and the international business activities:
The companies are now called E.ON Földgáz Trade Zrt.
and E.ON Földgáz Storage Zrt.
The E.ON Földgáz Group, the fourth largest
Hungarian company in terms of sales revenue, fitted
smoothly into the Pan-European Gas strategy and
structures in the months that followed. The positions
which had to be filled as part of the companies’
restructuring were taken by experienced specialists
from the European gas business of E.ON Ruhrgas, and
the Hungarian colleagues were also integrated into
the new structure without difficulty. One example
which deserves particular mention is the cooperation
between the Hungarian and German colleagues as
part of Regulation Management, which is so important
for the Földgáz companies. Since the takeover, this
strong cooperation has been built up and nurtured by
Board member, Claus Obholzer (top row, second photo
from the left, centre), and his colleague, Bibor Riesz
(top row, fourth photo from the left), together with the
staff.
Integration into the E.ON Group has meant that
both companies profit not only from the good cooperation between the expatriates deployed locally and
their Hungarian colleagues but also from the sharing
of experience and knowledge throughout the Group
in the spirit of best practice. This networking as well
as the provision of the necessary know-how are coordinated in a targeted and recipient-oriented manner
by the management and staff of E.ON Ruhrgas International AG. Furthermore, specialised knowledge is
Hungary
provided by experts from E.ON Ruhrgas International
AG and E.ON Ruhrgas AG itself. Many activities of
the post-merger integration of the two companies
required the intensive involvement and support of
the Essen team in cooperation with their Hungarian
colleagues. For example, the two companies have
benefited not only from the Group-wide best practice
systems but have also made their own contribution
to the development of this system. In addition, the
necessary reporting requirements and reporting paths
to the parent company have also been standardised
and made efficient. Alongside their activities on the
ground in cooperation with their respective colleagues
at head office in Essen, the expatriates seconded
by E.ON Ruhrgas International AG are thus important
contacts and links for Group integration. Jens-Peter
Vornhecke for example (top row, second photo from
the right), as the Integration and Coordination manager at E.ON Földgáz, has various contacts in Essen with
whom he regularly coordinates the establishment
and work of various decision-making bodies (including
the Board, Supervisory Board, Steering Committee).
Christopher Börger, Head of Reporting and Accounting
(top row, first photo on the left), is responsible for
the signing and further developing of service contracts with the parent company and for harmonising
the cost and reporting structures. The colleagues
from Hungary receive support and the legal and commercial expertise of the Essen team of the Hungarian
sub-business unit (SBU) in this work as well as with
other issues and projects. This team includes in-house
Hungary
legal counsel, Maria Lecheler (bottom row, first photo
on the right) as well as the two shareholdings controllers, Thomas Bechtoldt (bottom row, second photo
from the right) and Michael Philipp (bottom row, third
photo from the right, centre), who have coordinated
and pushed ahead the integration of the Földgáz companies from headquarters in Essen.
E.ON Földgáz has prepared itself in this spirit and
as an integral part of Pan-European Gas for the challenges which are expected at the beginning of 2008
when the gas market is fully liberalised. The company
is working flat out to develop suitable business
models for the customers on the free market. Therefore, in 2007 and 2008, there will again be many challenging tasks awaiting the staff both in Budapest and
in Essen. They know that, as part of the E.ON Group,
they have great latitude to shape their joint future.
13
14
Profile of the
International Affiliates
Affiliates
15
Baltic States
Estonia
In 2006, it was above all strong domestic consumption
which was responsible for the very high increase in
Estonia’s gross domestic product of 11.4 % in real
terms. Private demand was primarily boosted by clear
increases in disposable income and by an expansive
loan policy of the banks. Another engine for growth
was the companies which are still making investment
decisions to benefit from the fact that profits are
tax-free if they are reinvested. The unemployment rate
has nearly halved since 2003 and is now about 5.5 %.
The relatively high inflation rate of 4.4 % means that
the euro cannot yet be introduced.
AS Eesti Gaas, Tallinn
AS Eesti Gaas sells gas directly and indirectly to more
than 100,000 customers. To distribute its gas, Eesti
Gaas books transmission and distribution capacities
with its legally independent transmission company,
AS EG Vörguteenus. Vörguteenus operates, markets
and develops the 2,270 km pipeline system which it
has leased.
The increase in gas sendout compared with
2005 is due to the unusually cold weather in January
and February 2006. The highest growth rates were
recorded in the following segments: local distribution
companies, industry and district heat customers. However, the warm temperatures at the end of the year
Estonia
Capital*: Tallinn
Area in km2*: 45,227
Population*: 1.348 million
Total gas consumption
(bn kWh): 10.4
Investment: AS Eesti Gaas
Abbreviation: EESTI GAAS
Location: Tallinn
Interest %: 33.66
ERI** involvement: 1996 – 2000
through E.ON Ruhrgas,
since 2000 ERI
* Source: Federal Foreign Office 09/06
** E.ON Ruhrgas International AG (ERI)
partly cancelled out this increase in volumes. The
slight rise in gross earnings as a result of the higher
volumes sold and the increase in operating expenses
balanced each other out in 2006 so the net income of
Eesti Gaas in 2006 was on a par with the previous year.
The sharp increase in capital expenditure went into
connecting new regions of Estonia to the gas network.
One major investment project was the construction
of the new Vändra-to-Pärnu pipeline, which was completed in 2006.
AS Eesti Gaas, Tallinn
2005
2006
Share capital
EEK m
¤m
155.2
9.9
155.2
9.9
Capital expenditure
EEK m
¤m
131.5
8.4
173.4
11.1
Sales revenue
EEK m
¤m
1,232.4
78.7
1,711.0
109.4
Net income for the year
EEK m
¤m
51.5
3.3
51.6
3.3
bn kWh
8.0
8.2
Gas sales
ERI interest: 33.66 %
16
Affiliates
Latvia
The overall development of the economy in Latvia was
dominated by the strong growth of gross domestic
product of 11.9 % in real terms. The main motor for
growth was domestic demand. Direct investments by
foreign companies amounted to approx. 9 % of gross
domestic product in 2006. The relatively high inflation
rate of 6.6 % meant that the introduction of the euro
has been postponed indefinitely.
Latvia
Capital*: Riga
Area in km2*: 64,597
Population*: 2.3 million
Total gas consumption
(bn kWh): 17.6
Investment: JSC Latvijas Gaze
Abbreviation: LATVIJAS GAZE
Location: Riga
Interest %: 47.23
ERI involvement: since 1997
* Source: Federal Foreign Office 11/06
JSC Latvijas Gaze,
Riga
- is active at all levels of the supply
JSC Latvijas Gaze
chain from the import and transmission of gas to
its storage and distribution. The company operates a
steadily expanding pipeline network of more than
5,000 km and supplies over 424,000 customers. The
company further optimised the technical installations
of the Inčukalns underground storage facility which
it operates. This facility is important for the supply
security of the entire region.
Gas sendout developed well in the first half of
2006 as a result of the particularly cold weather in
the 2005/2006 winter months. However, this increase
in volumes was partly cancelled out by the relatively
mild temperatures in November and December. Due
- is exto the special items in 2005, JSC Latvijas Gaze
pecting profits for 2006 to fall. In 2006, the company
made major investments in the expansion and rehabilitation of the gas pipeline system and the underground storage facility, spending some ¤ 36 million.
ERI interest: 47.23 %
JSC Latvijas Gaze,
Riga
2005
2006*
Share capital
LVL m
¤m
39.9
57.3
39.9
57.2
Capital expenditure
LVL m
¤m
24.2
34.6
25.4
36.4
Sales revenue
LVL m
¤m
133.4
191.6
182.3
261.5
Net income for the year
LVL m
¤m
23.6
34.0
21.0
30.1
bn kWh
17.1
17.7
Gas sales
* provisional
Affiliates
17
Lithuania
Just like the other two Baltic states, the Lithuanian
economy also enjoyed strong growth in 2006. Lithuania’s gross domestic product rose by 7.4 % in real
terms in 2006, mainly as a result of steadily increasing
domestic demand. Although Lithuania’s inflation
rate was lower than its two Baltic neighbours at 3.8 %,
Lithuania was nevertheless refused entry into the
European Monetary Union planned for 2007. Inflation
was fuelled both by booming domestic demand and
rising energy prices.
Lithuania
Capital*: Vilnius
Area in km2*: 65,000
Population*: 3.4 million
Total gas consumption
(bn kWh): 31.2
Investment: AB Lietuvos Dujos
Abbreviation: LIETUVOS DUJOS
Location: Vilnius
Interest %: 38.91
ERI involvement: since 2000
Investment: AB Mazeikiu Elektrine**
Abbreviation: MPP
Location: Mazeikiai
Interest %: 10.9
ERI involvement: since 2006
Investment: AB Rytu Skirstomieji
Tinklai
Abbreviation: RST
Location: Vilnius
Interest %: 20.28
ERI involvement: since 2006
* Source: Federal Foreign Office 10/06
** Sold after merger with Mazeikiu Nafta
AB Lietuvos Dujos, Vilnius
AB Lietuvos Dujos is active both as a gas transmission
and a local distribution company, operating an approx.
1,800 km gas transmission system and an approx.
7,200 km distribution network. Thus Lietuvos Dujos
ensures that its some 540,000 customers receive the
gas they need and also offers competitive transmission services as well as allowing other gas importers
and traders fair access to the gas network. Its own
customers include residential, commercial and industrial customers, power stations, district heat companies
as well as agricultural customers. Furthermore, Lietuvos Dujos transports gas on behalf of OAO Gazprom
to the Russian exclave of Kaliningrad. In 2006, Lietuvos
Dujos increased the contractually agreed transit volumes to 12.4 billion kWh in line with demand. Lietuvos
Dujos invested approx. ¤ 35 million in the network
infrastructure in 2006 with the aim of improving
Lithuanian security of supply and expanding and rehabilitating the network.
Together with its partner and supplier Gazprom,
Lietuvos Dujos managed to cover the sharp rise in
demand during the unusually cold period at the beginning of the year in nearly all cases above and beyond
the guaranteed contractual quantities. Despite continued high investments in gas mains connections and
therefore the acquisition of new customers, Lietuvos
Dujos’s gas sendout fell in 2006, mainly as a result of
the mild temperatures in the last quarter. The fact that
net income was still higher than in the previous year
was mainly due to the rise in transmission and transit
volumes as well as an improved financial result owing
to special items.
AB Lietuvos Dujos, Vilnius
2005
2006
Share capital
LTL m
¤m
469.1
135.9
469.1
135.9
Capital expenditure
LTL m
¤m
190.9
55.3
122.2
35.4
Sales revenue
LTL m
¤m
595.5
172.5
778.3
225.4
Net income for the year
LTL m
¤m
36.1
10.5
59.1
17.1
Gas sales
bn kWh
14.7
14.1
Gas transit to Kaliningrad
bn kWh
7.5
12.4
ERI interest: 38.91 %
18
Affiliates
AB Rytu Skirstomieji Tinklai, Vilnius
AB Rytu Skirstomieji Tinklai is active in electricity
trading and distribution. The company supplies 720,000
customers in the east of Lithuania, its sales territory
thus covering approx. 50 % of the total area of the
country. Rytu Skirstomieji Tinklai owns and operates
a medium and low-voltage power grid with a total
length of 62,000 km. On the electricity trading side,
Rytu Skirstomieji Tinklai sells electricity at regulated
tariffs to commercial and residential customers under
its public service obligations. The company also sells
electricity to eligible customers in the industrial, agricultural and services segments at contractually agreed
prices as an independent electricity supplier. The company purchases about 50 % of the volumes of electricity it sells from the Ignalina nuclear power station.
The Lithuanian state is the majority shareholder with a
71.35 % interest. E.ON Ruhrgas International AG has
20.28 % and the other 8.37 % of the shares are traded
on the stock exchange.
The shareholding was transferred from E.ON
Energie AG, Munich, with effect from 3 July 2006 and
is thus included in the financial statements of E.ON
Ruhrgas International AG for the first time. Compared
with the previous year, the company performed stably
with electricity sales growing to 4.0 billion kWh. This
rise was due to new customers and also to increased
consumption as a result of the overall positive development in demand thanks to the flourishing economy.
Net income for the year was up on 2005. Rytu Skirstomieji Tinklai invested approx. ¤ 58 million in the grid
infrastructure in 2006 with the aim of further improving supply security and connecting new customers.
AB Rytu Skirstomieji Tinklai, Vilnius
2005
2006*
Share capital
LTL m
¤m
492.4
142.6
492.4
142.6
Capital expenditure
LTL m
¤m
156.8
45.4
199.8
57.9
Sales revenue
LTL m
¤m
871.4
252.4
933.5
270.4
Net income for the year
LTL m
¤m
17.0
4.9
24.5
7.1
bn kWh
3.7
4.0
Electricity sales
* provisional
ERI interest: 20.28 %
Affiliates
Central and South-Eastern Europe
Poland
The Polish economy experienced a further upswing in
2006. Gross domestic product increased by 5.8 % in real
terms, powered by exports, growing investments and
domestic consumption. In 2006, Poland was one of the
countries of the European Union with the most stable
prices with an average inflation rate of approx. 1.5 %.
Despite economic problems, such as increasing
public debt, the shortage of qualified labour as a
result of emigration and the still unsatisfactory infrastructure, the economy is expected to perform again
well in 2007.
Following the E.ON Group’s strategic decision to
pool the Polish affiliates under the umbrella of E.ON
edis AG, E.ON Ruhrgas International AG transferred
its 100 % interest in the Polish company, therminvest
Sp. z o.o., to E.DIS energia Sp. z o.o., Poznań, with effect
from 11 December 2006. On 22 December 2006, a purchase agreement was signed between E.ON Ruhrgas
International AG and E.DIS energia on the sale of the
shareholding in the Szczecin district heat company,
Szczecińska Energetyka Cieplna Sp. z o.o. This shareholding was transferred with legal and economic
effect from 1 January 2007.
Poland
Capital*: Warsaw
Area in km2*: 312,678
Population*: 38.65 million
Total gas consumption
(bn kWh): 150.2
,
Investment: Inwestycyjna Spó lka
Energetyczna Sp. z o.o.
Abbreviation: IRB
Location: Warsaw
Interest %: 50
ERI involvement: since 1999
Investment: Szczecińska
Energetyka Cieplna Sp. z o.o.**
Abbreviation: SEC
Location: Szczecin
Interest %: 32.92
ERI involvement: 2002 – 2006
Investment: therminvest
, z o.o.***
Spó lka
Abbreviation: THERMINVEST
Location: Gdansk
Interest %: 100
ERI involvement: 2001 – 2006
* Source: Federal Foreign Office 11/06
** Sale to E.DIS energia Sp. z o.o., Poznań/Poland, with effect from
1 January 2007
*** Sale to E.DIS energia Sp. z o.o., Poznań/Poland, with effect from
11 December 2006
, Energetyczna (IRB) Sp. z o.o.,
Inwestycyjna Spó lka
Warsaw
In 1999, E.ON International AG established the joint
venture, Investment Company for Energy – IRB, together with the Polish company, PHZ Bartimpex S.A.
The purpose of IRB, in which the two companies each
hold 50 %, is to plan and implement energy projects
designed to develop the Polish gas market.
ERI interest: 50 %
19
20
Affiliates
ERI interest: 32.92 %
Szczecińska Energetyka Cieplna Sp. z o.o. (SEC),
Szczecin
Szczecińska Energetyka Cieplna Sp. z o.o. is the local
district heat supplier of the city of Szczecin. The
company, whose majority shareholders since 2002
have been a consortium made up of MVV Polska and
E.ON Ruhrgas International AG, was established to
provide district heat for the inhabitants of Szczecin,
commercial and industrial companies as well as public
buildings and amenities. The consortium holds an
approx. 66 % stake in the company.
Szczecińska Energetyka Cieplna Sp. z o.o. (SEC), Szczecin
2005
2006
Registered capital
PLN m
¤m
126.5
32.7
126.5
33.0
Capital expenditure
PLN m
¤m
14.2
3.7
13.9
3.6
Sales revenue
PLN m
¤m
169.1
42.0
181.7
47.4
Net income for the year
PLN m
¤m
2.7
0.7
8.2
2.1
bn kWh
1.2
1.2
Heat sales
Affiliates
21
Romania
In 2006, Romania’s gross domestic product increased
sharply in real terms by 7.7 % (2005: 4.1 %). The agricultural sector, strong private consumption and the
construction industry were the main motors for this
strong growth. Inflation was cut sharply from 8.6 %
in 2005 to only 4.9 %. The value of the Romanian leu
against the US dollar rose by over 20 % and by about
8 % against the euro. Furthermore, the high interest
rates led to a considerable influx of funds into the
country. Romania thus continued its impressive economic success story of recent years and was therefore
well equipped for accession to the European Union
on 1 January 2007.
The greatest challenge for the gas industry in
2006 was the sharp rise in gas prices for the gas
purchased from international and indigenous sources.
This will continue to be an issue for residential customers, industry and the government in 2007 with
the prices for gas from domestic production likely to
double in the years to come.
Colonia Cluj-Napoca Energie S.R.L., Cluj-Napoca
Colonia Cluj-Napoca Energie S.R.L. is a joint venture
of the Cluj-Napoca-based district heat company,
Regia Autonoma de Termoficare (RAT), RheinEnergie
AG, Cologne, and E.ON Ruhrgas International AG.
Colonia Cluj-Napoca Energie S.R.L. operates packaged
cogeneration plants and boiler plants.
Thanks to the expansion of production capacity
in mid-2005, heat sales increased to 152.0 million kWh
and electricity sales to 39.6 million kWh. The customer
for the heat produced is the district heat company
Romania
Capital*: Bucharest
Area in km2*: 237,500
Population*: 21.6 million
(2002 census)
Total gas consumption
(bn kWh): 165.8
Investment: Colonia Cluj-Napoca
Energie S.R.L.
Abbreviation: CCNE
Location: Cluj-Napoca
Interest %: 33.33
ERI involvement: since 2000
Investment: S.C. Congaz S.A.
Abbreviation: CONGAZ
Location: Constanta
Interest %: 28.59
ERI involvement: since 2001
Investment: E.ON Gaz
România S.A.**
Abbreviation: EGR
Location: Târgu Mures
Interest %: 51
ERI involvement: since 2005
through E.ON Ruhrgas AG
* Source: Federal Foreign Office 04/07
** Acquisition by E.ON Ruhrgas AG, Essen; transfer to E.ON Ruhrgas
International AG, Essen, and in the next step transfer to the newly
established E.ON Gaz România Holding S.R.L., Târgu Mures/Romania,
in preparation
of the city of Cluj-Napoca, RAT. The electricity generated was sold to RAT and to Elektrika Bukarest. In line
with the expansion of business and the rise in prices
for primary energy, sales revenue rose to ¤ 6.7 million.
As a result of the fall in market prices for electricity,
the company’s net income for the year totalled
¤ 0.2 million in 2006 and was therefore slightly down
on the figure for 2005.
Colonia Cluj-Napoca Energie S.R.L., Cluj-Napoca
2005
2006
Registered capital
RON ‘000
¤m
12,880
3.5
12,880
3.8
Sales revenue
RON ‘000
¤m
14,334
3.9
22,535
6.7
Net income for the year
RON ‘000
¤m
1,169
0.3
535
0.2
Electricity sales
m kWh
14.8
39.6
Heat sales
m kWh
137.7
152.0
ERI interest: 33.33 %
22
Affiliates
ERI interest: 28.59 %
S.C. Congaz S.A., Constanta
S.C. Congaz S.A. and its 230 staff now supply gas to
nearly 18,000 customers – approx. 5,000 customers
more than in 2005 – in the Black Sea town of Constanta. In 2006, the company sold approx. 3.2 billion kWh
of gas. By far the majority of the gas was transported
to major industrial customers through pipelines of
other companies under third-party access.
S.C. Congaz S.A. invested approx. ¤ 9.0 million
in the expansion of its pipeline system in Constanta
and the connection of further communities in the
surrounding area in 2006. This dynamic development
is also to be continued in 2007.
S.C. Congaz S.A., Constanta
2005
2006
Share capital
RON m
¤m
47.9
13.0
47.9
14.2
Capital expenditure
RON m
¤m
19.9
5.9
30.5
9.0
Sales revenue
RON m
¤m
52.5
14.7
78.5
22.3
Net income for the year
RON m
¤m
15.8
4.4
16.6
4.7
Gas sales
bn kWh
3.1
3.2
Affiliates
E.ON Ruhrgas
interest: 51 %
E.ON Gaz România S.A., Târgu Mures
The company’s name was changed from Distrigaz
Nord S.A. to E.ON Gaz România S.A. with effect from
1 April 2006. The company is responsible for gas
trading and distribution in the northern part of Romania. Some 1.3 million customers are supplied every
year with approx. 39.0 billion kWh of gas through
an approx. 18,100 km pipeline system. Of this figure,
approx. 13.8 billion kWh is delivered to residential
customers, approx. 17.9 billion kWh to non-residential
customers and approx. 7.3 billion kWh to local distribution companies.
A new, more efficient organisational structure
was introduced on 1 January 2006. Integration into the
E.ON Group progressed. Furthermore, modernisation
work continued, particularly in the IT sector and on the
distribution network. These measures enable E.ON
Gaz România to successfully meet the challenges of
the increasingly competitive Romanian gas market,
to implement the regulation requirements and also
increase returns. 2006 was also marked by increased
cooperation with the electricity sister company, E.ON
Moldova S.A., E.ON Servicii România S.R.L. and the
Romanian subsidiary of E.ON IS. Thus, the E.ON customers in Romania also profited from the expertise
and the service of the E.ON Group. In north-eastern
Romania, E.ON gas and electricity customers can
already go to the joint customer centres of E.ON Gaz
România and E.ON Moldova with their questions.
The increase in sales revenue of more than 20 %
over 2005 is due to the sharp rise in gas prices. Compared with the previous year, gas sendout fell from
42.7 billion kWh by 3.7 billion kWh to 39.0 billion kWh.
This reduction in sendout in 2006 is mainly a result
of the warmer winter weather, a significant rise in gas
prices, the insolvency and restructuring of customers
as well as the loss of customers, so-called eligibles,
as a result of market opening and stiffer competition.
The decrease in the amount of gas sold to commercial
23
and industrial customers could not be fully compensated for by new customers in the residential segment. Due to the challenging regulatory framework in
Romania, special burdens from legal disputes, comparatively high gas losses, write-downs for uncollectible
accounts and restructuring expenses, the company
again failed to record a satisfactory result in 2006.
E.ON Gaz România finished the 2006 financial
year with a profit after tax of approx. RON 86.7 million
(¤ 24.5 million) (RAS GAAP, 2005: a loss of RON 122 million (– ¤ 34.0 million)). As a result of the loss carried
forward from the previous year, no dividend will be
paid to the shareholders.
In 2007, the implementation of the unbundling
requirements, the introduction of the customer billing
system throughout the company and measures to
enhance claims management efficiency and reduce
gas losses will play a major role. The regulatory and
political environment will continue to pose challenges
for the company.
At the end of 2006, E.ON Gaz România had
8,197 employees. This is a sharp decrease of approx.
1,100 employees compared with the beginning of the
year. All necessary staff reduction measures were
performed in a socially acceptable manner. E.ON Gaz
România conducted an employee opinion survey
in 2006. The participation rate was unusually high at
92.6 %. The evaluation of the survey shows good
results for the company.
The shares in the company are to be transferred
to E.ON Ruhrgas International AG and E.ON Gaz România Holding S.R.L. respectively in 2007.
E.ON Gaz România S.A., Târgu Mures
2005
2006
Share capital
RON m
¤m
433.1
117.7
433.1
128.0
Capital expenditure
RON m
¤m
100.1
28.0
82.9
23.5
Sales revenue
RON m
¤m
2,034.9
568.3
2,486.2
705.1
Net loss/income for the year
RON m
¤m
– 121.9
– 34.0
86.7
24.5
Gas sales
bn kWh
42.7
39.0
24
Affiliates
Slovakia
Capital*: Bratislava
Area in km2*: 49,030
Population*: 5.379 million
(last census in 2001)
Total gas consumption
(bn kWh): 66.4
Investment: Nafta a.s.
Abbreviation: NAFTA
Location: Gbely
Interest %: 40.45
ERI involvement: since 2004
Slovakia
The economic upswing enjoyed in previous years
continued in Slovakia in 2006. This is reflected in the
strong growth of gross domestic product of 8.3 % in
real terms in 2006. The new left-wing government
elected in summer 2006 has announced that social
aspects will have greater importance in their policies
again. The comprehensive reforms of the previous
government are, however, not to be reversed so the
industry-friendly business climate should continue.
The new government is also looking towards Europe
and has stated that it is in favour of a rapid introduction of the euro as the national currency with effect
from 1 January 2009.
Investment: Slovensk ý
plynárensk ý priemysel a.s.**
Abbreviation: SPP
Location: Bratislava
Interest %: 24.5**
ERI involvement: 2002 through
E.ON Ruhrgas AG, since 2005 ERI
following the transfer of E.ON
Ruhrgas Mittel- und Osteuropa
GmbH (ERMOE) to ERI
* Source: Federal Foreign Office 03/07
** through E.ON Ruhrgas Mittel- und Osteuropa GmbH, Essen, Slovak
Gas Holding B.V., Zoetermeer/Netherlands
– ERI interest: indirectly through Slovak Gas Holding B.V. (SGH),
Zoetermeer/Netherlands, and E.ON Ruhrgas Mittel- und Osteuropa
GmbH (ERMOE), Essen.
ERMOE has a 50 % interest in SGH and is a wholly-owned subsidiary
of E.ON International AG, Essen.
Affiliates
ERI interest: 40.45 %
directly as well as
13.7 % indirectly through
SPP a.s., Bratislava
Nafta a.s., Gbely
Nafta a.s. not only operates underground storage
facilities but also conducts gas and oil exploration
and production activities in Slovakia. In 2006, approx.
1,270.4 million kWh of gas and 27,663.0 tonnes of oil
were produced.
2006 was mainly marked by the merger of Nafta
with its wholly-owned subsidiary SVS, another successful step in the company’s restructuring process.
As part of this merger, the assets were revalued according to their fair values. This resulted – compared with
the values accounted so far – in a significant increase
25
in the asset values in the balance sheet according to
Slovak accounting standards.
The company continued to focus on its core business activities, gas storage and exploration/production
by selling some of its sideline activities. Commercially
speaking, the result of Nafta improved in 2006, also
because of the advantageous development of oil and
gas prices. The majority shareholder of Nafta a.s. is
Slovensk ý plynárensk ý priemysel a.s. (SPP), Bratislava,
which holds a 56.2 % interest in the company.
Nafta a.s., Gbely
2005
2006
Share capital
SKK m
¤m
3,231
85
3,231
94
Sales revenue
SKK m
¤m
4,521
119
6,074
176
Net income for the year
SKK m
¤m
1,391
37
2,203
64
Slovensk ý plynárensk ý priemysel a.s. (SPP), Bratislava
The gas business in Slovakia is mainly operated by
Slovensk ý plynárensk ý priemysel a.s. (SPP). SPP operates the gas transmission system in Slovakia for the
transit of Russian gas to western Europe as well as the
domestic distribution network. In 2006, the company
transported approx. 768.0 billion kWh of gas through
its transit system and supplied approx. 62.3 billion kWh
of gas to some 1.4 million Slovak customers through
its over 30,000 km distribution network.
2006 was dominated by the legal unbundling
of SPP. As part of this unbundling, the transit business
(i. e. the transport of gas through the high-pressure
system mainly from the Ukrainian to the Czech/Austrian border) and the distribution business (i. e. the distribution of gas from the transit system to the Slovak
gas consumers) were hived off into two wholly-owned
subsidiaries (SPP preprava a.s. and SPP distribucia
a.s.). The trading business and the central services
stayed with the parent company.
The operational business of the SPP Core
Group (SPP a.s., SPP preprava a.s., SPP distribucia a.s.)
remained stable. The company managed to supply the
Slovak customers without restriction and in line with
contracts despite the cold winter and the disruptions
to Russian gas supplies in January 2006. There were no
unusual restrictions on the transmission side, either.
Commercially speaking, the operating result of
the SPP Core Group developed stably in 2006. Special
items also had a positive impact on the operating
result, including the splitting of the company into several companies and the reversal of various provisions
for legal disputes which had since been settled.
Slovensk ý plynárensk ý priemysel a.s. (SPP), Bratislava
2005
2006
Share capital
SKK m
¤m
52,287
1,380
52,287
1,518
Sales revenue
SKK m
¤m
86,241
2,277
–*
–*
Net income for the year
SKK m
¤m
20,563
543
–*
–*
bn kWh
66.5
Gas sales
* Figures for 2006 were not available at the time of publication of this Annual Report
66.4
ERI interest:
24.5 % indirectly through
Slovak Gas Holding B.V.
(SGH), Zoetermeer/
Netherlands, and E.ON
Ruhrgas Mittel- und Osteuropa GmbH (ERMOE),
Essen. ERMOE has a 50 %
interest in SGH and is a
wholly-owned subsidiary
of ERI.
26
Affiliates
Slovenia
In 2006, the Slovenian economy was geared to the introduction of the euro on 1 January 2007. Of the ten EU
accession countries, Slovenia was the only one to fulfil
the criteria for the introduction of the euro. At 1.6 %
of gross domestic product, the budget deficit is well
below the 3 % maximum set in the Maastricht Stability
Pact. At 2.5 %, the inflation rate was also below the
2.8 % reference figure. Gross domestic product also increased by 4.8 % as against 4 % in 2005 with investment rising sharply.
In 2006, gas sales in Slovenia were again slightly
upon the previous year’s consumption at 14.7 billion kWh. Gas has a share of approx. 13 % in primary
energy consumption.
Slovenia
Capital*: Ljubljana
Area in km2*: 20,273
Population*: 2.004 million
(as at 30 Sept. 2005)
Total gas consumption
(bn kWh): 14.7
Investment: Geoplin d.o.o.**
Abbreviation: GEOPLIN
Location: Ljubljana
Interest %: 6.52
ERI involvement: since 2001
* Source: Federal Foreign Office 03/06
** through Ekopur d.o.o., Ljubljana/Slovenia
– ERI interest: indirectly through Ekopur d.o.o., Ljubljana, which is a
wholly-owned subsidiary of E.ON Ruhrgas International AG, Essen
Geoplin d.o.o., Ljubljana
Geoplin d.o.o. is responsible for the import and sale
of gas to major customers and distribution companies
in Slovenia. Geoplin purchases two thirds of its gas
from Russia; the other third is imported from Algeria
via Italy. Geoplin rents gas storage capacities in Austria and Croatia. Furthermore, Geoplin transits Russian
gas en route to Croatia. Geoplin Plinovodi d.o.o., a
wholly-owned subsidiary of Geoplin, is responsible for
the transmission of gas and operation of the approx.
960 km pipeline network.
ERI interest:
6.52 % indirectly through
Ekopur d.o.o., Ljubljana,
which is a wholly-owned
subsidiary of E.ON
Ruhrgas International AG
Geoplin d.o.o., Ljubljana
2005
2006
Registered capital
SIT m
¤m
7,388
30.8
7,388
30.8
Sales revenue
SIT m
¤m
67,707
282.7
81,592
340.5
Net income for the year
SIT m
¤m
5,892
24.6
7,925
33.1
bn kWh
14.3
14.7
Gas sales
Affiliates
Czech Republic
The Czech economy was boosted by the positive investment climate in 2006, and gross domestic product
rose by 6 % (forecast). Inflation ran at 2.5 %. Unemployment was cut to 7.7 % thanks to the steady expansion
of production capacities.
The elections for both houses of the Czech
parliament took place in 2006 (in the senate only one
third of the senators’ seats were up for re-election).
Following these elections, the two sides of the political spectrum had a more or less equal number of
seats. At the end of 2006, nothing had changed in this
politically instable situation.
This is having effects on energy policy. Important
decisions for securing energy supplies were delayed
(reduction of dependence on gas and oil imports,
expansion of new nuclear power stations).
The regulator decided to abolish gas market
regulation for all customer groups with effect from
1 April 2007.
In the Czech Republic, E.ON Ruhrgas International
AG has stakes in Moravské naftové doly a.s. (MND),
Hodonín, and in SPP Bohemia a.s., Prague. These two
companies are active in the field of gas storage
and MND is also involved in gas exploration and production. These interests are held indirectly through
EUROPGAS a.s., Prague, and Slovensk ý plynárensk ý
priemysel a.s. (SPP), Bratislava. EUROPGAS is a holding
company in which E.ON Ruhrgas International AG
has a 50 % stake.
Czech Republic
Capital*: Prague
Area in km2*: 78,866
Population*: 10.28 million
Total gas consumption
(bn kWh): 97.2
Investment: Moravské
naftové doly a.s.**
Abbreviation: MND
Location: Hodonín
Interest %: 43.4**
ERI involvement: since 2003
Investment: SPP Bohemia a.s.***
Abbreviation: SPP BOHEMIA
Location: Prague
Interest %: 37.25***
ERI involvement: since 2000
* Source: Federal Foreign Office 03/07
** through EUROPGAS a.s., Prague/Czech Republic, and
SPP Bohemia a.s., Prague/Czech Republic
– ERI interest: 37.05 % indirectly through EUROPGAS a.s., Prague
(ERI interest: 50 %), and 6.35 % through SPP a.s., Bratislava
(ERI interest: 24.5 %)
*** through EUROPGAS a.s., Prague/Czech Republic, and SPP a.s.,
Bratislava/Slovakia
– ERI interest: 25 % indirectly through EUROPGAS a.s., Prague
(ERI interest: 50 %), and 12.25 % through SPP a.s., Bratislava
(ERI interest: 24.5 %)
27
28
ERI interest:
43.4 % indirectly,
incl. 37.05 % through
Affiliates
Moravské naftové doly a.s. (MND), Hodonín
Moravské naftové doly a.s. (MND) is active in
exploration and production in the Czech Republic
and abroad as well as in the gas storage business. The
majority shareholder of MND is SPP Bohemia a.s.,
Prague, which holds a 51.8 % stake.
The company’s net income for the year rose as a
result of the high oil prices. It continued to develop
its exploration and production activities, both in the
Czech Republic and abroad.
EUROPGAS a.s., Prague,
(ERI interest: 50 %),
and 6.35 % through
SPP a.s., Bratislava
Moravské naftové doly a.s. (MND), Hodonín
(ERI interest: 24.5 %)
2005
2006*
Share capital
CZK m
¤m
806
27.8
806
29.3
Sales revenue
CZK m
¤m
3,607.3
124.4
3,827.3
135.0
Net income for the year
CZK m
¤m
2,013.9
69.4
1,597.2
56.4
* provisional
SPP Bohemia a.s., Prague
SPP Bohemia a.s., which is domiciled in Prague, stores
gas for Slovensk ý plynárensk ý priemysel a.s. (SPP),
Bratislava, and has shareholdings in three Czech
regional gas companies, Severomoravská plynárenská
a.s. (SMP) (20.2 %), V ýchodočeská plynárenská a.s.
(VCP) (18.6 %) and Jihomoravská plynárenská a.s. (JMP)
(2.3 %). EUROPGAS a.s., Prague, and SPP a.s., Bratislava,
each have a 50 % interest in SPP Bohemia a.s. The
company performed stably in 2006.
ERI interest:
37.25 % indirectly,
incl. 25 % through
EUROPGAS a.s., Prague
(ERI interest: 50 %),
and 12.25 % through
SPP Bohemia a.s., Prague
SPP a.s., Bratislava
2005
2006
Share capital
CZK m
¤m
1,100
37.9
1,100
40.0
Sales revenue
CZK m
¤m
618.7
21.3
631.1
22.3
Net income for the year
CZK m
¤m
431.5
14.9
832.3
29.4
(ERI interest: 24.5 %)
Affiliates
Hungary
In 2006, the Hungarian economy grew by 4 % in real
terms. However, at 7.5 % unemployment was high. At
the beginning of the year, inflation dropped to a low,
but rose again in the second half of 2006, averaging
approx. 3.3 % over the year as a whole. In the first nine
months of the year, approx. ¤ 3.7 billion was invested
in Hungary – the highest influx of capital into Hungary
to date.
This high influx of capital was mainly due to the
acquisition of the MOL gas trading and gas storage
companies by E.ON Ruhrgas International AG.
In 2006, total gas consumption in Hungary ran at
approx. 147.3 billion kWh and was thus slightly down
on the figure for the previous year as a result of the
mild weather at the end of 2006. Approx. 33 % of the
gas was used for the direct space heating of Hungarian
homes, 35 % for power generation and the rest for
other industrial and commercial customers. If the district heat generated using gas is added to the gas
consumed directly by residential customers, approx.
78 % of Hungarian homes are heated with gas.
Hungary
Capital*: Budapest
Area in km2*: 93,000
Population*: 10.08 million
(as at January 2007)
Total gas consumption
(bn kWh): 147.3
Investment: E.ON Földgáz
Storage Zrt.**
Abbreviation: EFS
Location: Budapest
Interest %: 100
ERI involvement: since 2006
Investment: E.ON Földgáz
Trade Zrt.**
Abbreviation: EFT
Location: Budapest
Interest %: 100
ERI involvement: since 2006
Investment: Panrusgáz Zrt.
Abbreviation: PANRUSGÁZ
Location: Budapest
Interest %: 50
ERI involvement: since 2006
* Source: Federal Foreign Office
03/07
** 0.15 % of E.ON Földgáz Storage
Zrt., Budapest/Hungary, and
0.02 % of E.ON Földgáz Trade Zrt.,
Budapest/Hungary, are held by
RGE Holding GmbH, Essen
The E.ON Földgáz Group:
E.ON Földgáz Trade Zrt. and E.ON Földgáz Storage Zrt.,
Budapest
The full takeover of the two companies, MOL Storage
(storage business) and MOL WMT (trading business)
by E.ON Ruhrgas International AG was completed with
effect from 31 March 2006. The two companies were
then renamed E.ON Földgáz Storage Zrt. and E.ON
Földgáz Trade Zrt. in mid-2006.
On 12 July 2006, a framework agreement was
signed between E.ON AG and OAO Gazprom on the
exchange of gas production and gas trading assets as
well as shareholdings in electricity and gas sales
companies. As part of this agreement, E.ON AG is to
acquire a share of 25 % minus one voting right in the
Siberian gas field, Yuzhno Russkoye. In return, OAO
Gazprom is to receive a 50 % share minus one vote in
both E.ON Földgáz Trade Zrt. and E.ON Földgáz Storage
Zrt. as well as 25 % plus one vote in E.ON Hungária Zrt,
Budapest. This process is expected to be completed
in 2007. The transaction is still subject to approval by
the Hungarian and European authorities.
E.ON Földgáz Storage Zrt. is planning to extend its
storage capacities and intends to contribute 50 % of
the cost of the construction of the so-called Hungarian
strategic gas storage facility as part of an agreement
with MOL.
29
30
Affiliates
E.ON Földgáz Storage Zrt. (EFS), Budapest
E.ON Földgáz Storage Zrt. operates the five underground gas storage facilities, Pusztaederics, Kardoskút,
Hajdúszoboszló, Zsana and Maros I in Hungary. The
total working gas capacity of the five underground
storage facilities is approx. 3,500 million m3 with an
injection capacity of approx. 25 million m3/day and a
peak withdrawal capacity of approx. 47.5 million
m3/day, which is roughly 50 % of peak requirements
on a winter day. The sales revenue of E.ON Földgáz
Storage Zrt. amounted to approx. ¤ 108 million in
the period from April to December 2006; EBIT ran
at approx. ¤ 60 million. Sales revenue is expected to
rise slightly in 2007 and profits to remain stable.
ERI interest: 100 %
E.ON Földgáz Storage Zrt. (EFS), Budapest
2006
Figures for 9 months
26.3
Share capital
¤m
Capital expenditure
¤m
25.5
Sales revenue
¤m
108.4
Net income for the period
¤m
24.8
ERI interest: 100 %
E.ON Földgáz Trade Zrt. (EFT), Budapest
E.ON Földgáz Trade Zrt. is the largest gas trading
company in Hungary with a sales volume of approx.
135.0 billion kWh in 2006. Most of this gas is purchased
through Panrusgáz Zrt., Budapest, a joint venture of
E.ON Ruhrgas International AG (50 %), OOO Gazprom
Export, Moscow, (40 %) and Centrex Hungária Zrt.,
Budapest (10 %). Together with the gas purchased
from E.ON Ruhrgas AG and Gaz de France S.A., Paris,
this makes up 75 % of total gas purchases. Other gas
comes from indigenous sources (18 %) as well as from
the Hungarian trader Emfesz (approx. 7 %). The gas
is sold to twelve Hungarian gas distribution companies as well as to industrial customers and power
stations. In the period from April to December 2006,
the sales revenue of E.ON Földgáz Trade Zrt. amounted
to approx. ¤ 1.94 billion; EBIT was approx. – ¤ 85 million
due to the losses resulting from state regulation.
Partial reimbursement of the losses and a profit for
the year are expected in 2007.
E.ON Földgáz Trade Zrt. (EFT), Budapest
2006
Figures for 9 months
23.3
Share capital
¤m
Capital expenditure
¤m
1.4
Sales revenue
¤m
1,943.6
¤m
– 105.5
bn kWh
77.0
Net loss for the period
Gas sales
Affiliates
31
Scandinavia
Finland
In 2006, Finland’s gross domestic product increased by
4.3 % in real terms, one of the best growth rates in
the EU 15. One major driver of this economic growth
was higher exports. Inflation ran at 1.3 %. The focus of
investments, which made up approx. 20 % of gross
domestic product, shifted from construction to plant
and equipment. The economic upswing generated a
3 % budget surplus and cut the unemployment rate to
below 8 % at the end of the year.
All the gas required by the country is imported
from Russia and covers 11 % of primary energy demand. The gas pipeline network is in the densely populated southern part of Finland. Here there is further
expansion potential for gas in competition with the
less environmentally friendly energies, coal and oil.
Overall, approx. 47 % of the gas went to industrial
customers, 51 % was used for municipal electricity
and district heat generation. This share will increase
in the years to come as the demand for electricity in
Gasum Oy, Espoo
Gasum secures gas supplies for Finland and ensures
sufficient liquidity on the secondary wholesale market.
The company operates a 1,050 km high-pressure gas
transmission system which stretches from Imatra on
the Russian-Finnish border in the southeast of Finland
to Lohja and Kyröskoski. In addition, Gasum operates
approx. 450 km of the 1,440 km gas distribution network in Finland, selling approx. 400 million kWh of gas
through it. Gasum is also active in the Estonian distribution market.
Since 2001, Gasum has been operating a gas exchange for the secondary wholesale market on which
just under 3 % of all gas consumed in Finland is traded.
It is planned to change the trading conditions in 2007,
bringing them into line with those on the electricity
exchange and making them more flexible for the customers. This should increase the volume of gas traded
from 2007 onwards.
Finland
Capital*: Helsinki
Area in km2*: 338,145
Population: 5.26 million
(2005, source: Statistics Finland)
Total gas consumption
(bn kWh): 50.2
Investment: Gasum Oy
Abbreviation: GASUM
Location: Espoo
Interest %: 20
ERI involvement: since 1999
* Source: Federal Foreign Office 10/06
Finland is growing. The residential and commercial
sector is slow to develop and only accounts for 2 % of
gas consumption.
In 2006, Gasum took part in a feasibility study on
the construction of an offshore pipeline connecting
the Finnish and the Baltic gas pipeline systems. The
aim is to strengthen Finland’s supply security.
The supply of gas to a diesel production plant
since the beginning of 2007 is a further diversification
of Gasum’s gas marketing portfolio.
Thanks to the cold weather in the first quarter,
Gasum managed to considerably increase its gas sendout compared with the previous year. Furthermore,
the high electricity prices on the Nord Pool electricity
exchange led to higher sales of gas to power stations.
Gasum Oy, Espoo
2005
2006*
178.8
Share capital
¤m
178.8
Capital expenditure
¤m
38.7
37.2
Sales revenue
¤m
635.0
879.8
Net income for the year
¤m
22.6
44.5
bn kWh
41.9
45.4
Gas sales
* provisional
ERI interest: 20 %
32
Affiliates
Norway
In 2006, Norway’s gross domestic product rose by 2.5 %
in real terms and inflation also ran at 2.5 %.
Norway would like to use its own abundant gas
deposits more for end consumers. However, the government wants to make sure that the state subsidies
granted in support of this programme do not disadvantage more environmentally friendly alternatives.
Therefore, Norway is currently examining whether
it would be sensible to introduce a CO2 tax on the use
of gas for space-heating purposes.
Ferries have now become customers for gas.
Natural gas in the form of LNG is to reduce pollution,
particularly in the fjords.
Industry has increased its gas consumption in
recent years to approx. 6 %. However, there is still little
gas used in power generation and in the residential
sector.
Gasnor AS, Karmoy
Gasnor, which has existed in this form for two years
now and in which E.ON Ruhrgas International AG
holds a 14 % stake, is Norway’s leading gas distribution
company.
In recent years, Gasnor has developed the LNG
supply chain to such an extent that it sold as much
LNG as pipeline gas in 2006. LNG is a cost-efficient way
of supplying the mainly industrial customers in scattered and remote areas by tanker and truck. The use
of LNG to fuel ferries offers potential for long-term,
steady sales volumes for Gasnor.
Norway
Capital*: Oslo
Area in km2*: 324,000
(incl. Spitzbergen and
Jan Mayen: 385,000)
Population*: 4.66 million
Total gas consumption
(bn kWh): 3.5
Investment: Gasnor AS
Abbreviation: GASNOR
Location: Karmoy
Interest %: 14
ERI involvement: since 2001
* Source: Federal Foreign Office 10/06
The commissioning of a third LNG facility in
mid-2007 and another LNG tanker in 2008 will permit
further expansion of the LNG business.
In the Haugesund region, an 80 km pipeline system is the basis for the spread of gas supply.
In 2006, Gasnor acquired the remaining shares in
the regional sales companies, Naturgass Helgeland
and Naturgass Trondelag, in which it already had majority shareholdings. Furthermore, Gasnor has minority
interests in SFE Naturgass (West and Fjord Norway
district), Naturgass Møre and Naturgass Grenland.
Gasnor AS, Karmoy
2005
2006
Share capital
NOK m
¤m
57.7
7.2
57.7
7.0
Capital expenditure
NOK m
¤m
169.7
21.3
277.3
33.7
Sales revenue
NOK m
¤m
260.5
32.6
309.4
37.6
Net income for the year
NOK m
¤m
4.7
0.6
14.0
1.7
Gas sales
bn kWh
1.1
1.2
ERI interest: 14 %
Affiliates
33
Sweden
In 2006, Sweden’s gross domestic product grew by
4.3 % in real terms. At the same time, consumer prices
rose by 1.5 %.
The first annual regulation period ended in 2006.
The tariffs of the gas transmission companies will be
reviewed in an ex-post procedure in mid-2007. 2006
was also the first year in which the state-run company,
Svenksa Kraftnät, performed the network supervision
functions, in particular the balancing functions, as a
so-called independent system operator.
Gas currently only accounts for 2 % of Swedish
primary energy consumption. However, this will rise by
approx. one percentage point in the medium term
when two gas-fired power stations are commissioned.
Gas currently covers over 20 % of the energy requirements of the people living in the southwest of the
country within reach of the Swedish high-pressure
pipeline network.
The government’s long-term policy is for the
country to be independent of energy imports and
fossil fuels.
Swedegas AB, Gothenburg
Swedegas AB – until February 2007 Nova Naturgas
AB – is responsible for the technical and commercial
operation of the main strand of the high-pressure
pipeline from the Dragør delivery station on the Danish-Swedish border along the southwest coast to
Stenungsund, roughly 50 km north of Gothenburg. The
company transports all the gas required in Sweden
over a distance of 370 km to gas supply companies
and industrial customers.
43 % of the gas goes to power and district heat
generating plants. Industrial companies, which use
gas as a raw material and for space-heating purposes,
account for 40 %. The residential and commercial sector uses the remaining 17 %.
Sweden
Capital*: Stockholm
Area in km2*: 450,000
Population*: 9.0 million
Total gas consumption
(bn kWh): 11.2
Investment: Swedegas AB**
(formerly Nova Naturgas AB)
Abbreviation: SWEDEGAS
Location: Gothenburg
Interest %: 29.59
ERI involvement: since 1997
* Source: Federal Foreign Office 11/06
** Renamed in 2007
The connection of a power station to the Swedegas network in Gothenburg in November 2006 should
boost the volume transported by approx. 11 % in 2007.
This will also increase the importance of Sweden’s
gas industry for national energy supplies. Furthermore,
Swedegas AB is involved in studies which are being
conducted in preparation for the construction of a
pipeline to connect Norway and Sweden.
The sales revenue of Swedegas AB increased
slightly in 2006, mainly as a result of a new tariff system. If it had not been for a special tax item, net income
for 2006 would have been higher. Generally speaking,
the difficult regulatory framework does not permit
growth, which prevents any improvement in profits.
Swedegas AB, Gothenburg
2005
2006*
Share capital
SEK m
¤m
120.0
12.8
120.0
13.3
Capital expenditure
SEK m
¤m
50.2
5.3
79.0
8.7
Sales revenue
SEK m
¤m
204.2
21.7
216.0
23.9
Net income for the year
SEK m
¤m
51.7
5.5
27.8
3.1
bn kWh
9.6
11.0
Volume of gas transported
* provisional
ERI interest: 29.59 %
34
Affiliates
Western Europe
Luxembourg
In 2006, Luxembourg’s gross domestic product grew
by 5.5 % as the economy flourished while inflation ran
at 2.7 %. So far 78 % of the gas market has been liberalised and it is to be opened fully for competition by
1 July 2007.
Luxembourg
Capital*: Luxembourg
Area in km2*: 2,586
Population*: 0.46 million
Total gas consumption
(bn kWh): 15.9
Investment: Société de Transport
de Gaz S.A.
Abbreviation: SOTEG
Location: Luxembourg
Interest %: 20
ERI involvement: since 1997
* Source: Federal Foreign Office 11/06
ERI interest: 20 %
SOTEG – Société de Transport de Gaz S.A., Luxembourg
Société de Transport de Gaz S.A. supplies the Twinerg
combined-cycle power plant, industrial customers and
local distribution companies in Luxembourg through
its 390 km high-pressure pipeline network. Gas sales
are divided roughly equally among these three segments.
Higher sales to the steel industry more than compensated for the losses in other industrial sectors.
The result from the electricity trading business also
contributed to the profits of the company.
SOTEG – Société de Transport de Gaz S.A., Luxembourg
2005
2006
Share capital
¤m
20
20
Capital expenditure
¤m
5.6
5.7
Sales revenue
¤m
288.3*
444.5*
Net income for the year
¤m
10.6
16.1
bn kWh
15.3
16.7
Gas sales
* incl. sales revenue from the electricity trading business
Affiliates
35
Switzerland
Gross domestic product in Switzerland grew by 2.7 %
in 2006 while inflation ran at 1.1 %. Gas consumption
accounts for roughly 13 % of the country’s primary
energy consumption. This low figure compared with
the European average (25 %) is due to the small
amount of gas used for power generation.
Switzerland
Capital*: Bern
Area in km2*: 41,285
Population*: 7.473 million
Total gas consumption
(bn kWh): 34.9
Investment: Holdigaz SA
Abbreviation: HOLDIGAZ
Location: Vevey
Interest %: 2.21
ERI involvement: since 1993
* Source: Federal Foreign Office 10/06
ERI interest: 2,21 %
Holdigaz SA, Vevey
Holdigaz SA is the result of the merger of CICG Holding
SA and SGPR Holding SA in 2005. Two subsidiaries
were established during the 2005/2006 financial year,
Holdigaz Trading SA for gas sales and Holdigaz Management SA as a service provider.
In 2005/2006, Holdigaz SA supplied 37 communities in the canton of Waadt in western Switzerland
through its 597 km pipeline network. Of the 1.1 billion
kWh of gas sold in 2006, 75 % went to residential
customers, 19 % to commercial companies and 6 % to
industry.
Holdigaz SA, Vevey
2004/2005*
2005/2006
Share capital
CHF m
¤m
20.5
13.2
20.5
12.9
Sales revenue
CHF m
¤m
108.2
69.9
129.7
82.1
Net income for the year
CHF m
¤m
5.1
3.3
4.8
3.0
Gas sales
m kWh
1,012
1,078
* Pro-forma financial statements of Holdigaz SA as at 31 March 2005
36
Profile of the
National Affiliates
Affiliates
Germany
General Development
In 2006, gross domestic product rose in Germany by
2.7 % in real terms. With the global economy growing
sharply and production capacities being more fully
utilised, there was, above all, an increase in capital
spending. By contrast, private consumption recovered
little and consumer prices rose by only 1.7 %, less
sharply than in 2005.
In 2006, primary energy consumption increased in
Germany by 1.2 % to 345 mtoe, gas consumption rose
by 1.5 % to 1,016 bn kWh. Gas accounted for 22.8 % of
primary energy consumption.
Regulation
The German affiliates were also affected in 2006 by
preparations for the regulation of network fees.
Saar Ferngas Transport GmbH, Saarbrücken, Ferngas
Nordbayern GmbH, Nuremberg, and Erdgasversorgungsgesellschaft Thüringen-Sachsen mbH, Erfurt, all
submitted their cost-based fee applications to the
Federal Network Agency (BNetzA) on schedule at the
end of January 2006.
Gas-Union Transport GmbH & Co. KG, Frankfurt
am Main, established fees in the comparison market
in accordance with Section 19 of the Gas Network Fee
Ordinance (GasNEV) and notified the Federal Network
Agency accordingly. The Federal Network Agency made
deductions from the proposed fees of Gas-Union
Transport GmbH & Co. KG in August 2006. Gas-Union
Transport GmbH & Co. KG has appealed against this
decision.
In November, the final regulation notices for the
gas networks of the other three companies were
issued. The Federal Network Agency cut the proposed
network fees of Ferngas Nordbayern GmbH by approx.
19 %, those of Erdgasversorgungsgesellschaft Thüringen-Sachsen mbH by approx. 10 % and those of Saar
Ferngas Transport GmbH by approx. 5 %.
Germany
Capital*: Berlin
Area in km2*: 357,050
Population*: 82.5 million
Total gas consumption
(bn kWh): 1,016.0
Investment: European Energy
Exchange AG
Abbreviation: EEX
Location: Leipzig
Interest %: 0.26
ERI involvement: since 2000
Investment: Erdgasversorgungsgesellschaft Thüringen-Sachsen
mbH**
Abbreviation: EVG
Location: Erfurt
Interest %: 50**
ERI involvement: since 1990
through E.ON Ruhrgas AG
Investment: Ferngas Nordbayern
GmbH***
Abbreviation: FGN
Location: Nuremberg
Interest %: 53.1***
ERI involvement: 1962 – 1995
through E.ON Ruhrgas AG,
1995 – 2002 ERI,
since 2002 RGE Holding GmbH
Investment: Gas-Union GmbH***
Abbreviation: Gas-Union
Location: Frankfurt am Main
Interest %: 25.93***
ERI involvement: 1968 – 1994
through E.ON Ruhrgas AG,
1994 – 2002 ERI,
since 2002 RGE Holding GmbH
Investment: Saar Ferngas AG***
Abbreviation: SFG
Location: Saarbrücken
Interest %: 20***
ERI involvement: 1976 – 1995
through E.ON Ruhrgas AG,
1995 – 2002 ERI,
since 2002 RGE Holding GmbH
* Source: Federal Foreign Office
10/06
** through E.ON Ruhrgas AG, Essen,
looked after by E.ON Ruhrgas
International AG, Essen
*** through RGE Holding GmbH,
Essen, which is a wholly-owned
subsidiary of E.ON Ruhrgas
International AG, Essen
37
38
Affiliates
ERI interest: 0.26 %
E.ON Ruhrgas
interest: 50 %
European Energy Exchange AG (EEX), Leipzig
EEX AG continued to expand in 2006, setting a new
record by increasing the volumes of electricity
traded on the EEX spot and futures markets by 88 %
to 1,133 TWh (2005: 602 TWh). The electricity futures
market developed particularly well with volumes
traded increasing by 102 % from 517 TWh to 1,044 TWh.
Growth was also recorded on the spot and futures
markets for CO2 emission rights as well as on the
futures market for coal which started up in May. The
number of companies participating increased from
132 to 158 in 2006. They come from a total of 19 countries (2005: 16 countries).
In 2007, it is planned to establish a gas exchange
in Germany in cooperation with E.ON Gastransport AG
& Co. KG, Essen.
Erdgasversorgungsgesellschaft Thüringen-Sachsen
mbH (EVG), Erfurt
Erdgasversorgungsgesellschaft Thüringen-Sachsen
mbH (EVG) supplies gas to industrial companies,
municipal utilities and regional gas supply companies
in Thuringia, Saxony, Saxony-Anhalt and Hesse through
its approx. 1,200 km pipeline network.
In 2006, gas sendout fell slightly by 2 % to
22.6 billion kWh due to the mild temperatures in the
last quarter. Accordingly, net income for the year
decreased by 5 % to ¤ 26.3 million.
At the end of 2006, EVG set up an independent
gas transmission division which is to be leased to
an independent transmission subsidiary in the course
of 2007. Sales revenue from the transmission of gas
for third parties was on a par with the previous year.
The interest is held by E.ON Ruhrgas AG and
looked after by E.ON Ruhrgas International AG.
Erdgasversorgungsgesellschaft Thüringen-Sachsen mbH (EVG), Erfurt
2005
2006
Registered capital
¤m
32.0
32.0
Capital expenditure
¤m
0.9
0.9
Sales revenue
¤m
620.1
739.8
¤m
27.8
26.3
bn kWh
23.1
22.6
Net income for the year
Gas sales
Affiliates
ERI interest: 53.1 %
(through RGE
Holding GmbH)
Ferngas Nordbayern GmbH, Nuremberg
Ferngas Nordbayern GmbH delivers gas to 36 gas
utilities and their over 360,000 customers through its
more than 2,000 km high-pressure pipeline network.
Furthermore, the company supplies 116 large, mainly
industrial, customers in Bavaria, Saxony, Thuringia
as well as Baden-Württemberg. Ferngas Nordbayern
GmbH holds shares in several energy utilities in its
sales territory.
FGN increased its gas sendout slightly by 0.1 billion kWh to 31.0 billion kWh in 2006. The 1.3 % fall in
sendout to distribution companies to 22.9 billion kWh
due to the unusually mild temperatures in the last
quarter of 2006 was more than offset by higher gas
sales to direct customers (+ 4.3 % to 8.0 billion kWh). As
a result of lower tax expense, net income for the year
39
rose by ¤ 1.9 million to ¤ 24.2 million. The decrease in
taxes was a result of the first-time recognition of the
corporation income tax credit of FGN and the leasing
of the business operations of Kommunalgas Nordbayern GmbH to E.ON Bayern AG from 1 January 2006.
FGN will meet the legal unbundling requirements
not by establishing its own transmission company, but
by leasing its pipeline network to a project company
of E.ON Gastransport AG & Co. KG, Essen, yet to be
established.
Ferngas Nordbayern GmbH, Nuremberg
Registered capital
¤m
2005
2006
33.0
33.0
Capital expenditure
¤m
1.6
1.7
Sales revenue
¤m
784.6
984.4
¤m
22.3
24.2
bn kWh
30.9
31.0
Net income for the year
Gas sales
Gas-Union GmbH, Frankfurt am Main
Gas-Union GmbH supplies gas to utilities and industrial companies in Hesse and four bordering federal
states. The high-pressure pipeline system has a
length of approx. 500 km. The company has a stake in
an energy utility in the former East German states
and also operates an underground gas storage facility
in Hesse.
To comply with the legal unbundling requirements, Gas-Union GmbH has established an independent transmission company, Gas-Union Transport GmbH
und Co. KG (GUT).
Gas-Union GmbH’s sendout was on a par with the
figure for 2005 at 43.7 billion kWh. Net income for
the year increased by ¤ 0.4 million to ¤ 13.2 million.
ERI interest: 25.93 %
(through RGE
Holding GmbH)
Gas-Union GmbH, Frankfurt am Main
2005
2006*
Registered capital
¤m
23.0
23.0
Capital expenditure
¤m
6.4
14.9
Sales revenue
¤m
1,057.1
1,277.9
Net income for the year
¤m
12.8
13.2
bn kWh
43.8
43.7
Gas sales
* provisional
40
Affiliates
Saar Ferngas AG, Saarbrücken
Saar Ferngas AG already leased its approx. 1,700 km
high-pressure pipeline network to an independent
subsidiary – Saar Ferngas Transport GmbH – in 2005.
Through this subsidiary, Saar Ferngas AG supplies
52 regional and local energy companies as well as 20
industrial customers and power stations in the Saarland as well as in parts of Baden-Württemberg and
the Rhineland-Palatinate. With its underground storage facility, Frankenthal, the company has its own
storage capacities and also holds a large number of
interests in domestic and foreign energy utilities.
Despite the increasingly difficult market environment and the unfavourable weather in the last quarter
of 2006, Saar Ferngas AG managed to keep gas sendout on a par with the previous year at 44.7 billion kWh.
ERI interest: 20 %
(through RGE Holding
GmbH)
Saar Ferngas AG, Saarbrücken
Share capital
¤m
2005
2006
50.0
50.0
Capital expenditure
¤m
52.3
18.2
Sales revenue
¤m
1,166.0
1,429.3
¤m
38.3
45.2
bn kWh
45.1
44.7
Net income for the year*
Gas sales
* before appropriation of profits and payments to minority interests
Assuming responsibility for progress
through active partnership
42
Best Practice in Romania
One example of constructive cooperation between E.ON Ruhrgas
International AG (Dr Sven Anders, Shareholdings Developer for central and
south-eastern Europe – first photo on the left, left) and E.ON Ruhrgas AG
(Diethelm Mohr, Head of Customer Service – third photo from the right).
Joint customer care centre of E.ON Gaz România S.A.
and E.ON Moldova S.A. in Iasi.
Best Practice in Romania
Central and south-eastern Europe remains a dynamic
market. Economic growth is well above the average
for western EU countries. The demand for energy is
rising steadily in the countries of eastern Europe. This
growing energy requirement is partly driven by increasing consumer demand for technical appliances
and equipment. Furthermore, there is a strong trend
towards the expansion of energy plants. This trend
can only be partly offset by energy-saving measures.
Part of the E.ON Group’s strategy is to rapidly integrate the east European companies into the Group’s
structures. Parallel to this, the companies are preparing themselves to meet the challenges of a Europeanwide liberalised market. It is therefore also a matter
of sustaining the long-term competitiveness of the
companies.
With this aim in mind, the east European E.ON
Group companies are also intensifying their cooperation with each other. Together they define and implement optimised processes. These activities are closely
intermeshed with other best practice initiatives in
the Group.
“OneE.ON” – the motto for the growing-together
of Group companies – has already become reality
in Romania as well. One example of this is the joint
customer care centres of E.ON Gaz România and
E.ON Moldova (E.ON Moldova, Bacau, supplies approx.
1.3 million customers with some 4 billion kWh of electricity). In the customer care centres, the customers
find qualified staff who can answer questions on both
gas and electricity. It is planned to open further customer care centres shortly. Joint call centres are also to
be established in the near future. These measures will
further intensify cooperation between the companies.
The involvement of a 20-strong integration team
made up of E.ON Ruhrgas International and E.ON
Ruhrgas staff is helping to promote successful cooperation at E.ON Gaz România. In the meantime, about
ten staff from Germany have now moved to work
for several years in Târgu Mures, the headquarters of
E.ON Gaz România S.A. Last year, the team gave an
impressive performance not only in the speed with
which they introduced and handled the integration
process but also, in particular, the great commitment
they showed beyond the boundaries of one company.
It was especially pleasing to see that the integration
process is a good example of international successful
cooperation. The performance of the project team is
outstanding and is just one example of the excellent
Best Practice in Romania
Opening of the joint customer care centre in Bacau by Dr Achim
Saul, Director-General of E.ON Gaz România S.A. (second photo
from the right, left), and Günther Schubert, Director-General of
E.ON Moldova S.A.
Customer care centre in Bacau.
quality of work in many other sectors of our Group.
In recognition of their work, the team received the
2006 OneE.ON prize for “The Integration of E.ON Gaz
România”. This award is conferred for particularly good
examples of how OneE.ON is lived in daily life.
The rebranding, which took place in the E.ON
Ruhrgas Group in mid-2006, was already successfully
implemented at E.ON Gaz România on 1 April 2006.
The company had started restructuring in 2005. The
aim was to become more efficient with a new organisational structure and be better equipped for future
challenges. The new corporate identity which has
come out of all the changes and developments is
bringing E.ON Gaz România closer to the corporate
culture and the values of the E.ON Group. This will
make the company even more competitive and customer-oriented.
Customer orientation will be intensified through
joint projects between E.ON Ruhrgas International
and E.ON Ruhrgas. In these projects, process analyses
and optimisations will be performed on behalf of our
affiliates with a view to more effective cooperation
between the project management and sales teams.
The aim is, as for example at Congaz in Constanta, to
offer the affiliates’ customers shorter waiting times
and more accurate scheduling of their connection to
the gas mains. This gives the customers more reliable
information for planning the installation of their gas
space-heating systems and also provides the companies with a new customer loyalty instrument. This
cooperation ensures that the guiding principle of “one
face to the customer” is practised in the respective
countries and as much know-how as possible is transferred.
43
44
Shareholdings Development, Legal Affairs and Shareholdings Controlling Departments
Profile of the Shareholdings Development, Legal Affairs and Shareholdings Controlling Departments of E.ON Ruhrgas International AG
Within the Pan-European Gas market unit headed
by E.ON Ruhrgas, E.ON Ruhrgas International AG is
responsible for the growth and development of over
20 midstream and downstream energy affiliates in
15 European countries.
The core task and at the same time main challenge for E.ON Ruhrgas International AG is to optimally
control the different affiliates in the spirit of partnership and also to exploit gas and other synergies in and
between the affiliates of E.ON Ruhrgas International,
E.ON Ruhrgas and within the E.ON Group in Europe.
More than half of the staff of E.ON Ruhrgas International AG now work locally in seven European
countries. Here they are directly entrusted with the
management of the respective companies.
These employees are given crucial support by
their colleagues at the head office of E.ON Ruhrgas
International AG in Essen. Here more than 30 employees make sure that know-how is shared with the
colleagues at the local affiliates.
One corporate goal of E.ON Ruhrgas International
AG is to increase the value of the portfolio of affiliates.
In order to achieve this goal, the employees of the
foreign affiliates are, for example, given support in
their work with market development measures, such
as programmes for customer care or the improvement of their organisational and cost structures.
E.ON Ruhrgas International AG has a lean organisational structure. The staff in Essen report to three
Board members. This ensures the clear assignment of
tasks which are basically divided up into three fields
of activity: shareholdings development, legal affairs
and shareholdings controlling.
The shareholdings development team supports
their colleagues in Europe with the further development of their respective companies. Moreover, as project managers, they ensure that the investment portfolio is expanded. In order to optimally exploit existing
know-how, short-term task forces made up of shareholdings developers, shareholdings controllers, inhouse legal counsels and other specialists are set up
to handle further acquisitions in northern, western,
central and south-eastern Europe.
The legal experts of E.ON Ruhrgas International
AG are always there to help both the local team and
the individual affiliates, whether on questions of
company law (agreements on the acquisition or sale
of shares), the drafting of contracts (e. g. gas purchase
or sales contracts) or on other legal issues (contracts
of employment etc.).
The employees in the Shareholdings Controlling
department perform the commercial controlling,
reporting, financial and accounting functions for the
companies. The information gathered from the analysis and preparation of company data is compiled and
reported to the parent company, E.ON Ruhrgas AG.
The key factor with all these activities is that all
staff work together with their colleagues in the affiliates, developing pan-Group and cross-border cooperation with a view to creating a European network of
E.ON companies. As a result of this cross-border cooperation, E.ON Ruhrgas International AG can confidently
say: We are at home in Europe.
Using our energy and experience
for success in Europe
46
Financial Statements
E.ON Ruhrgas International AG
Balance Sheet as at 31 December 2006
Assets
31 Dec. 2005
¤ ‘000
31 Dec. 2006
¤
81
77,579
Fixed assets
Tangible assets
Other fixtures and fittings, tools and equipment
Financial assets
1,530,764
2,300,395,499
Participating interests
484,635
503,706,117
Other long-term loans
147
137,301
2,015,627
2,804,316,496
137,347
968,746,953
Shares in affiliated undertakings
Current assets
Debtors and other current assets
Amounts owed by affiliated undertakings
Amounts owed by undertakings with which the
company is linked by virtue of participating interests
458
0
Other current assets
498
88,031,523
138,303
1,056,778,476
Cash at banks and cash in hand
Prepayments and accrued income
1,766
3,984,177
140,069
1,060,762,653
32
29,320
2,155,728
3,865,108,469
Financial Statements
Shareholders’ Equity and Liabilities
31 Dec. 2005
¤ ‘000
31 Dec. 2006
¤
Capital and reserves
Subscribed capital
Share premium account
Reserves
156,000
156,000,000
1,765,852
1,765,852,497
12,831
12,830,518
1,934,683
1,934,683,015
Provisions for liabilities and charges
Provisions for pensions
a) Pension obligations
b) Exemption amount from debt assumption
6,857
10,343,606
0
– 10,343,606
6,857
0
Provisions for taxes
5,870
5,870,000
Other provisions
5,512
11,456,887
18,239
17,326,887
417
814,046
202,056
1,910,946,729
Creditors
Trade creditors
Amounts owed to affiliated undertakings
Other creditors
333
1,337,792
202,806
1,913,098,567
2,155,728
3,865,108,469
47
48
Financial Statements
E.ON Ruhrgas International AG
Profit and Loss Account
for the Year Ended 31 December 2006
Income from participating interests
of which from affiliated undertakings
Income from profit-and-loss transfer agreements
2005
¤ ‘000
2006
¤
40,819
40,626,996
(931)
(375,159)
139,484
146,048,875
4,972
100,274,322
185,275
286,950,193
Wages and salaries
7,902
12,020,975
Social security costs
1,594
4,061,186
(1,106)
(3,420,897)
9,496
16,082,161
Other operating income
Staff costs
of which for pensions
Depreciation of tangible assets
Other operating charges
Other interest and similar income
of which from affiliated undertakings
Interest payable and similar charges
of which to affiliated undertakings
Profit on ordinary activities
Taxes on income and earnings
Other taxes
Net income before transfer of profit
56
57,934
9,667
107,988,130
367
28,624,936
(340)
(27,082,534)
6,887
45,304,009
(5,301)
(44,969,922)
159,536
146,142,895
– 5,039
– 13,872,179
8
10,073
164,567
160,005,001
49
Published by:
E.ON Ruhrgas International AG
Huttropstrasse 60, 45138 Essen, Germany
T + 49 2 01-1 84-00
F + 49 2 01-1 84-15 50
www.eon-ruhrgas-international.com
Designed by:
Kuhn, Kammann & Kuhn AG, Cologne
Printed by:
druckpartner Druck- und Medienhaus GmbH, Essen
Photographs by:
E.ON Ruhrgas AG, Essen