Atel Group results for the first half of 2002

In the first half of 2002, the Atel Group made satisfactory progress overall. It further expanded its trading operations in the Energy segment and profited from the increased energy consumption in the European integrated network. In the Energy Services segment, results have been held back by the current weakness of the economy and the pressure on prices.

Higher operating profit for the Group The Atel Group's consolidated turnover rose by 5 per cent to CHF 1.8 billion. The increase is attributable, among other factors, to the first-time consolidation of the Norwegian Energipartner Group and the Italian STC Atel engineering company. 65 per cent of turnover derived from the Energy segment and 35 per cent from Energy Services. Operating profit (EBIT) rose by around 2 per cent to CHF 132 million. Group profit, after the depreciation of goodwill and value corrections, fell by 6 per cent in comparison with the very good results achieved last year, to CHF 103 million. Investment in tangible fixed assets and holdings doubled, primarily owing to the acquisition of production capacity in Italy, from CHF 135 million to CHF 291 million. Taking into account the satisfactory level of profits, shareholders' equity has been further increased.

Turnover in the Energy segment above expectations During the first six months of 2002 Atel's Energy segment achieved a 13 per cent increase in turnover, to CHF 1.2 billion. Earnings for the segment were CHF 5 million, or 4 per cent, below earnings in the previous year. Sales of electricity in the traditional energy business rose by 9 per cent to 19.1 billion kilowatt-hours. In addition to this turnover, in the first half of 2002 the Atel Group traded in standardised products to the extent of approx. 21 billion kilowatt-hours, or approx. CHF 0.8 billion. In accordance with the principles of prudent accounting and the new regulations issued by the U.S. Financial Accounting Standards Board (FASB), these trading operations are no longer incorporated in gross turnover, but in net turnover. The overall trading volume for standard products totalled approx. 161 billion kilowatt-hours in the report period.

Difficult market conditions in the Energy Services segment In the first half of the year, the Swiss AIT Group and the German GAH Group together achieved currency-adjusted turnover of CHF 635 million, a fall of 5 per cent. While AIT increased turnover in Switzerland and Italy by 2 per cent, GAH suffered from the difficult economic conditions in Germany. In the first half of 2002, GAH's turnover fell by 7 per cent. Profits for the segment, affected by seasonal variations, fell in comparison with the previous year by CHF 2 million or 29 per cent.

Outlook In the Energy segment Atel expects a further increase in turnover with costs remaining favourable overall. In the second half of the year, the Energy Services sector will still have to contend with the poor economic conditions and the difficult situation in the market. In the 2002 financial year, Atel Group management expects turnover for the Group as a whole of CHF 3.6 billion, not including standardised products. Group profit and cash flow are expected to be below the previous year's levels. The reason for this is the absence of the exceptional factors which made 2001's annual results exceptionally strong, such as, in particular, above-average hydraulicity.

Aare-Tessin Ltd. for Electricity Corporate Communications

Note to editors: The complete Interim Report for 2002 is available as pdf document.

* Excluding standardised products ** Not including minority interests *** Average number of personnel in full-time equivalents