Hello, ladies and gentlemen, and welcome to the conference call of EVN's results for the first three quarters of the 2021/2022 financial year. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Mr. Stefan Szyszkowitz.
Good morning, and welcome to the conference call on EVN results for the first three quarters of the 2021/2022 financial year. We are operating in an energy environment which is characterized by historic distortions. Last summer, we started to witness post-COVID price hikes. Since then, energy market prices continuously reached new record highs. The war in Ukraine and the growing inflation made things worse, and there are still no signs of a turnaround and a normalization. The impacts of these developments on EVN and our integrated business model are varying. For generation, higher prices are positive and provide for a certain upset. For our energy supply business, however, higher prices turn into a burden. In Southeast Europe, the higher electricity prices are a challenge for the whole energy sector there. Our activities are especially impacted by rising costs from network losses.
In both countries, extraordinary government, respectively regulatory measures, were introduced as partial compensation for the significant rise in energy procurement costs. The remaining additional costs should be reflected in future tariff decisions by the regulatory authorities. Due to the recent deterioration of the geopolitical and economic environment, above all, the global supply chains, we had to reassess the risk and earnings expectations for EVN Group of the international project business of WTE. This resulted already during the second quarter in impairment losses to goodwill in the international project business into the residual carrying amount of the two combined sludge-fired heat and power plants in Moscow. Our investment level in the reporting period was high. We were able to increase investments by 26.5% to EUR 344.3 million. This is in line with our commitment to further increase CapEx.
The focus of our investment remains on networks, renewable energy, and drinking water in Lower Austria. With this, we clearly contribute to our climate strategy, our science-based targets, and energy's future in general. We are also actively working on our target to further increase renewable generation capacities. We are currently working on four wind power projects and one large-scale photovoltaic project, which will add a total of 90 MW to our generation portfolio. Let me now continue with these key financials of the reporting period. The group's revenue was up by 64.6% year-over-year. The main reason for this development was the sharp rise in electricity prices, which had a strong impact on revenue in Southeast Europe, as well as from renewable generation.
In Austria, the higher network tariffs set by Energie-Control Austria as of the 1st of January 2021 had a positive influence on network revenue. The more frequent use of the Theiss power plant by the Austrian transmission network operator and network stabilization offset the lost revenue due to disinvestment from the Walsum 10 power plant. Both were also recorded in the international project business. I would like to remind you that last year in Q1, we had a one-off from the takeover of an additional electricity procurement right from the Walsum 10 power plant. Other operating income included a positive one-off, which depreciation was increased by a required impairment. The cost of electricity purchases from third parties and primary energy expenses were substantially up at EUR 1.7 billion. The main driver were higher energy procurement costs in Southeast Europe, corresponding to the revenue growth.
Other factors include the more frequent use of the Tyrolean power plant and higher procurement costs for our heating business. The share results on equity-accounted investee was down by 35.1% at EUR 100.7 million. Most of the decline was due to the performance of our supply company, EVN Cateni. Based on these developments, EBITDA was down by 11.8% at EUR 578.1 million. As already mentioned, we had to record impairment losses in the second quarter on account of the international project business and two combined heat and power plants in Moscow. These impairment losses are contrasted by a revaluation of EUR 6.4 million to the Kavarna wind farm in Bulgaria, which we recorded in the first quarter.
The previous year was affected by impairment losses totaling EUR 113.3 million to the Theiss power plant, as already mentioned. In total, the group's EBITDA declined by 0.6% to EUR 290.2 million. Financial results was up by EUR 2 million at EUR 4.8 million, an increase in the dividend from Verbund from the 2021 financial year, and the decline in interest expenses following the scheduled redemption of a bond in April 2022 are contrasted by weaker performance of the R138 fund and negative foreign exchange development. In total, we generated a group net result of EUR 278.4 million, which represents a slightly year-on-year increase by 1.7%. Now I would like to move to the next slide, which provides some information regarding the group's balance sheet structure.
EVN's net debt amounted to EUR 1.1 billion. Gearing ratio amounted to 14.4%. Our financial flexibility is solid. We benefit from lower net debt and sufficient committed undrawn credit facilities, which amounted to EUR 602 million as of the end of June 2022. In April, we linked our corporate bond with a nominal amount of EUR 300 million. As refinancing measures, we issued a registered bond with a nominal value of EUR 155 million in April, and a Schuldschein loan with a nominal value of EUR 157 million in July. Let's move on now to the next slide, which covers the generation segment in more detail. Electricity generation volumes in this segment were down by 3.2% year-on-year.
The reason was the absence of 1,010 following the disinvestment of our stake last year. On the other hand, our Theiss power plant was called more frequently by the Austrian Transition Network operator for network stabilization. The share of renewable generation increased to roughly 54% compared to last year's 60%. As average wind flows partly offset the decline in hydro power. Revenue was up year-on-year. Higher electricity prices compensated the decline in electricity generation. EBITDA amounted to EUR 24.1 billion. Also, due to the revaluation of the Kavarna Wind Park in Bulgaria, segment EBIT increased to EUR 179.2 million. On the next slide, I will continue with the energy segment. Revenue was up due to volume and price effects from the marketing of our own electricity production.
In addition, higher sales volumes and price adjustments supported revenue growth of our heating business. Therefore, segment revenues rose sharply and stood at EUR 171.6 million. Operating expenses rose due to costs for primary energy carriers for the increased use of the Theiss power plant, as well as higher procurement costs for the heating business. According to our contracts in the heating business, higher energy costs will be passed on to customers once or twice a year based on price index mechanism, so there's a certain time lag. The sales volume showed different developments, whereas the electricity sales remained stable, natural gas sales declined due to milder temperatures and savings effects by customers. The earnings contribution from an equity-accounted investee company, EVN KG, declined due to higher procurement costs.
Based on this development, the energy segment reported an EBITDA of EUR 7.7 million and an EBIT of -EUR 8 million. I would like to explain now how we deal with the current price pressure on our supply business. Roughly half of the natural gas customers and about 40% of the electricity customers have chosen a supply contract with a floating tariff, where the price is automatically adjusted on a monthly basis to reflect the development of wholesale prices. The remaining customers have selected a supply contract with prices that are fixed for a certain period. Here, the prices are based on the Austrian electricity price index and the Austrian gas price index, and they are already increased for electricity as of January and for natural gas as of February. In August, we amended the general delivery terms for the fixed price supply contracts.
In future, these prices may be adjusted twice each year based on the mentioned price indexes. The first adjustment will already take place in September 2022. With these measures, we aim for a balanced result for EVN trading. On the next slide, I will present the development in our networks segment. Network sales volumes showed a slight decline in electricity, whereas natural gas volumes rose due to the increased use of gas-fired generation from network stabilization. In the beginning of 2021 and 2022, there were also regulatory increase tariffs for both electricity and natural gas. Based on this volume and price development, segment revenue will be up by 5.8%. EBITDA in the network segment increased by 2.9% and EBIT by 3.2%. On the next slide, I will continue with the Southeast Europe segment.
Temperatures in Southeast Europe are below the previous year and long-term average, which had positive volume effects. In addition, customer change from the liberalized market supported growth in sales volumes. In combination with higher prices, these developments resulted in sharp rise in revenue. As already mentioned, in the beginning of this call, our Southeast Europe segment suffered from rising costs for network losses due to higher market prices. In both countries, extraordinary government respectively development measures provide for at least partial compensation for the significant rise in energy procurement costs. In Bulgaria, our distribution network operator and our heating company received compensation payments in total amount of EUR 86.3 million to cover higher costs at the end of June 2022. Regular tariff decision as of 1st of July resulted in an average price increase of 3.6% for household customers in EVN supply area.
In North Macedonia, the regulator announced extraordinary increases in the electricity prices for household customers of EVN Home and in the network tariffs as of the 1st of January 2022 as a partial compensation for the significant rise in energy procurement costs. This was followed by a further increase of 21.8% for household customers of EVN Home as of the 1st of July 2022, and the electricity purchase price was set at EUR 48 MWh. Network tariffs are also increased a second time as of the 1st of July. The remaining additional costs shall be reflected in future tariff decisions. Segment EBITDA was down at EUR 66.3 million, and segment EBIT amounted to EUR 8.4 million.
I would like to conclude my presentation of the segments with the environment segment. The geopolitical developments, being the war in Ukraine, inflation, and some economic outlooks and global supply chain issues, have already changed the group's risk and earnings expectation for the international project business of WTE. Therefore, already in the second quarter, we had to record impairment losses to goodwill in the international project business in the amount of EUR 52.9 million, and to the residual carrying amount of the two sludge-fired cogeneration plants in Moscow, which was EUR 4.4 million as at the end of March. Apart from these two plants, we don't pursue any environmental projects in Russia or Ukraine. The financial performance of the segment is in line with the development in the international project business.
In line with the progress on the Kuwait project, there was a corresponding rise in total revenue and operating expenses in the segment. EBITDA amounted to EUR 42 million. EBIT declined due to the aforementioned impairment losses and amounted to -EUR 14.5 million. With this, I conclude the presentation of this segment. On the next slide, I will continue with the development of our group cash flows. Op cash flow was substantially lower at EUR 589.1 million. Please remember that it was an unusual high in the previous year due to the receipt of a compensation payment for the takeover of an electricity procurement plant. The decline was reduced slightly by higher dividends from the equity-accounted investees. The decline in cash flow from operating activities are even higher in comparison.
The sharp rise in energy prices and lower investment are headwinds today, and the group's cash flow was affected by working capital and group effects. The cash flow from investing activities was influenced chiefly by year-over-year increase in investment in property, plant, and equipment, and a change in investment in cash funds. The cash flow from financing activities included three new bank loans for a total of EUR 250 million, and the issue of a registered bond with a nominal value of EUR 155 million. The repayment of a bond with a nominal value of EUR 300 million and the dividend payment to our shareholders and non-controlling interests represented a contrary factor. The net change in cash and cash equivalents amounted to -EUR 110.8 million.
As mentioned before, our financial flexibility is solid, secured with committed undrawn credit facilities of EUR 622 million as at the end of June 2022. I would like to conclude my presentation with the outlook for the group. We are going through an extraordinary year with substantial distortions, which were not foreseeable at the beginning of this financial year. This led to unexpected deviations in some of our activities. On a group level, however, we are confident that our diversification and management measures will provide resilience to our financial performance. Hence, I confirm our guidance for this financial year. We expect the group net result in 2021-2022 to be in range of approximately EUR 200 billion-EUR 204 billion. With this, I have reached the end of my presentation. I am now looking forward to answering your questions.
Ladies and gentlemen, if you would like to ask a question, please press nine star on your telephone keypad. If you would like to withdraw your question, press nine and star again. I will repeat the combination. It's nine and star on your telephone keypad. The first question comes from Ms. Desiree Verschoor of BNP Paribas Exane . Please go ahead.
Hi, good morning. First question is on the special dividend of Verbund. Is there already a plan how to use the proceeds of the dividend? Which has been my first question.
Okay. First of all, the special dividend is just announced by Verbund for the end of the financial year 2022. If the AGM is voting on that and able to receive it in May of 2023, and our financial year in this year will close on the 30th of September 2023. It will be in the next financial year of EVN.
Okay. I read that as a wait-and-see position from.
First you have to close the financial year, and then you can have a proposal to your shareholders. Which is what we have to follow the corporate governance very correctly.
Yeah, sure. My second question is, thank you for presenting us or giving us the information on the contract structure or the share of the contract structures. Has this changed since the beginning of the sharp energy price increases, so the 40/60 share, for example, with electricity. Can you tell us a bit more about how the retail customers, the household customers reacted to the price environment?
No. This process, this development of changing and shifting of the tariff structure for our end customers is underway since the last 2.5 years. Fortunately, it was started much earlier than these extra prices were taking place. Therefore, our supply company has decreased the risk of the delay of the possibility to adjust prices for end customers, and at the same time was already being obliged to buy at higher wholesale prices. We are expecting now with our package of kind of reductions and benefits that there will be even a higher share of customers take the opportunity to lock in actual prices and therefore take the stability of 12 months over the year.
Therefore, I would expect that the share of customers who are having a special product on not the general terms anymore will further increase. I would not be surprised when we reach a kind of percentage also on electricity, that the old general terms will be only the basis for below 50% of the end customers. This development which we are seeing over the last period will be further accelerated. Therefore, people will take the opportunity to lock their current prices at least for the next 12 months.
Understood. Sorry if I didn't get it, but you mentioned the order backlog in environmental project business.
It's around EUR 1 billion.
Okay, thank you very much. That's all from my side.
At the moment there are no further questions. I will read once again. Ladies and gentlemen, you can still state your questions. Please press nine star on your telephone keypad. There seem to be no further questions in the queue. I hand over to Mr. Szyszkowitz.
Thank you for joining today's conference call. We will publish the results of our 2021/2022 financial year on Thursday, the f15th of December. Please join us then again, and stay healthy, and goodbye.