Good morning, ladies and gentlemen, and welcome to the conference call on EVANS Q1 TO Q3 2020 2021 Results. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation. Let's now turn the floor over to your host, Mr. Stefan Shyskovic.
Good morning and welcome to the conference call on EVN results for the 1st 3 quarters of the 2020 21 financial year. Yirend showed a sound performance in the reporting period. EBITDA, EBIT and good net results are above the previous year. The main drivers for these improvements were the earnings contribution from an equity accounted industries, in particular, our supply company, Yvein Cartier, And developments in our environment segment, in particular, the start of the Kuwait project. The network segment also reported higher results.
This was due to the positive volume and price effect. The Corona prices only had selective negative impacts on our operating results. Our integrated business model and a widely diversified customer base continue to be the stabilizing factors. Our investment levels was high. We were able to increase investments by 27.5 percent to €156,300,000 This is in line with our commitment to further increase CapEx.
Our plan is to invest on average up to €450,000,000 per year in the future. Therefore, ARPU34 will be directed towards regulated and stable activities in lower Austria. The key investment focus now and in the future is on network infrastructure. These investments fulfill 3 strategic objectives: Basic year supply security enable a carbon free energy future and provide for further growth of our regulated business. Product investment areas are renewable generation, biomass and drinking water.
In wind generation, we make product toplers to grow our installed capacity, which is almost 400 megawatts by now. I would like to remind you that EVM is Austria's 2nd largest wind power producer. A recent increase was made to the acquisition of an existing windpack and lower our service and installed capacity of 18.5 Megawatt. Closing of this acquisition took place at the end of June. To be precise, the group's installed wing capacity is now 3 94 Megamatt.
When we announced our Strategy 2,030 in last December, we always stated very clearly that it is our will and ambition To make a substantial contribution to limit the consequences of climate change. It is, therefore, our plan to further reduce the specific CO2 emissions from electricity production. As part of this strategy, I would like to inform you that we are currently negotiating with our joint venture partner, STIAC, And the consortium of banks to prematurely exit from the hardcore power plant project by Zolm Tem in Germany. Subject to the necessary approvals, we aim for stepping out of the project in the course of this financial year without incurring any negative financial effect. Let me now continue with the key financials of the reporting.
The group's revenue was up by 12% year on year. The main reason for this development is the start of the construction of the Veystad project in Kuwait. Other positive factors included Increase in energy sales in Bulgaria and higher net sales to the cooler weather in all three core markets as well as the higher network set by the E Control in Austria as of 1st January 2021. Contrail factors were Lower effects from devaluation of hedges, volatility generation and a decline in revenue from natural gas trading. The main reason for the rise in EBITDA was higher earnings contributions from our equity accounted industries.
Higher investments led to a rise of scattered depreciation and amortization. In connection with the takeover of an additional electricity procurement head And an impairment loss of €130,000,000 were recognized on the Vison power plant already in the Q1. For a year on year comparison of effects from impairment testing, please bear in mind that higher country risk premiums For Southeastern European countries, due to the COVID-nineteen, had triggered impairment losses of EUR 14,500,000 in the previous year. Based on these developments, the group's EBIT was up 2.6% and amounted to €291,900,000 Financial results improved EUR 2,800,000 supported by the among others the higher dividend from Perpond for the 2020 financial year. In total, we generated a group net result of US224.6 million dollars which represents an increase by 6.6 Same over the previous year.
I would like to move to the next slide, which provides some information regarding the group's balance sheet structure. Ebrahim's net debt amounted to €770,900,000. Gearing ratio was down to 13.1%. Our financial flexibility is solid. We benefit from the lower net debt Insufficient committed unkron credit facilities, which amounted to EUR 541,000,000 as of the end of June In 2021, our strong balance sheet structure forms the basis of pursuing organic growth opportunities in our regulated and stable Austin activities.
Before I will go through each of these segments in details, I would like to give you a general overview On the EBITDA development of our business segments. The EBITDA's development per segment illustrates the key drivers of our performance during the reporting period With the exception of Energy in Southeast segment Europe, all other segments showed improvements in comparison with the previous year. Let's move now to the next slide, which covers the generation segment in more detail. Electricity generation volumes in this segment were up by 3.1 and year on year. Renewable generation benefited from good water floors and thermal generation exceeded the lower prior year level.
Good water floors and higher market prices for electricity led to an increase in revenue from renewable generation despite a decline in wind power. EBITDA was up at €148,800,000 This increase was mainly due to a positive one off effect related to the takeover of an electricity procurement drive, which took place in the Q1. In addition, there was a reevaluation of our equity consolidated investment in the Ashta hydropower plant in the amount of €9,600,000 In the previous half year, we had to record an impairment loss of €4,900,000 due to higher country risk premiums at that period time. Both effects are driven by country risk loans at a discount rate. In the previous year, it increased and this year, it went down again.
Scattered depreciation and amortization increased as a result of higher investment. In total, the Generation segment generated a higher EBIT of 88,300,000. On the next slide, I will continue with the Energy segment. I would like to remind you that the development of revenue in the Energy segment depends primarily on the marketing of electricity generated in EVANS power plants, besides in sync the revenue from our domestic heating business. The first three quarters, higher revenue from the Our own thermal electricity production and from our district heating company only partially offset the year on year decline in the valuation effects from hedges Natural gas trading.
Therefore, revenue was down by 21.2%. Operating expenses were nearly at prior year level, But these were influenced by various contrary effects. Firstly, the take off on additional electricity procurement right led to a positive one off effect, It was during the year followed by provisions of our nurse contracts. Secondly, there was an increase in procurement cost for our heating business. Finally, there was a reduction in the procurement costs in line with the decline in revenue from natural gas trading.
The energy sales volume showed positive developments. Electricity, natural gas and heat sales volumes were above the prior year level. The increase in demand for natural gas and heat was out of some cold temperatures. Please be reminded that there was a temporary decline in sales to industrial due to COVID-nineteen in the previous year. In this year, Kona did not have any material negative effects on energy demand.
The share of results from equity accounted investees with operational nature improved by €44,700,000 This increase was supported by a sound operating performance of Eden Cadet and positive effect from valuation of hedges. Based on these developments, the Energy segment reported EBITDA of €50,700,000 and EBIT of €34,700,000 On the next slide, I will present the developments in our network segments. Network sales volumes increased Reported by stronger demand for electricity and natural gas in the household customer segment due to lower temperatures in lower Austria. Another reason was that the demand for electricity was negatively influenced by COVID-nineteen in the previous year. This year, There was no material negative effects on the network sales volumes from the COVID-nineteen pandemic.
At the beginning of the new calendar year, the Austrian River New net tariffs. Gas for electricity were increased by 6.3% on average and those for natural gas were increased by 6.4% on average. Based on these volumes and price developments, segment revenue increased by 6.4%. EBITDA in the network segment was up 16.8% and EBITDA 28%. On the next slide, I will continue with the Southeast Europe segment.
Temperatures in Southeast Europe were below both previous year and long term average, which has positive volume effects. In Bulgaria, we are facing stronger competition following the market liberalization for commercial customers As of October 2020, based on these developments, we are reporting today an increase in network sales volumes, whereas energy sales volume nearly matched the previous year. Segment EBITDA was below the prior year level. Higher revenues was contrasted by rising energy procurement costs And lower sales margins in the regular supply business in North Macedonia. In contrast, segment EBIT was slightly up.
As already mentioned, higher country risk premiums for Southeastern Europe and countries due to COVID-nineteen triggered impairment losses of US14.5 million dollars in the previous year. I would like to conclude my presentation with the segments with the environment segment. In our international project business, We can rely on a solid order book of about €1,300,000,000 as of the end of June. In total, WTE Basel Technik is currently working on 9 projects in Germany, Lithuania, Poland, Romania, Bahrain and Quebec. In addition to our joint venture company Sludge TO Energy, is currently working on Riese sewage sludge treatment project in Germany.
The financial performance of the segment is in line with the difference in the international project business. There was a corresponding rise of both revenue and International Supply Chain's cost delays in the project business. All in all, the segment benefited from the start was a positive one off effect at our lower Austrian water supply company. In total, this development led an increase in EBITDA to euros €2,800,000 and €8,000,000 to €23,500,000 With this, I conclude the presentation of this segment. On the next slide, I will continue with the development of our group cash flows.
Gross cash flow was substantially up At €700,900,000 This was mainly due to a receipt of a compensation payment for the takeover Open electricity procurement rate. A further factor was the higher balance of dividends from equity accounted investees. For year on year comparison, please also be in mind that last year, the dividend from Verbund AG was only received in the Q4. The increase in cash flow from operating activities was even higher in comparison due to the developments in the working capital. Cash flow from investing activities was influenced chiefly by a year on year increase in investment in property, plant and equipment and the change in investment in cash funds.
The cash flow from financing activities reflected a scheduled repayment of loans and the dividend payments to our shareholders' non controlling interest. And contrary factor was the issuance of a clean private placement. The net cash the net change in cash and cash equivalents And monthly total €63,800,000 I would like to conclude my presentation with the confirmation of the outlook of the group. Assuming average conditions in the Energy business environment, we expect a good net result in 2021 will be in the range of approximately €200,000,000 to €230,000,000 However, the further cost of the corona crisis and the resulting macroeconomic effects Could have a negative influence on individual preferred EVM and in turn on the development and earnings for the entire group. I can also confirm our dividend policy.
It is directed to holding the absolute amount of the dividend at least constant at €0.49 per share. I'm now looking forward to answering your questions.
And we already have one question that comes from Mr. Peter Krampton of Barclays. Please go ahead.
Good morning. It's Peter Krampton here from Barclays. Two questions. First one is short. If you exit Valsum, that should essentially mean that EVN is coal free, correct?
And then the second question relates to the renewable kind of energy kind of plans of Straya, they're quite aggressive talking about CO2 neutrality by 2,030. And I was just wondering kind of EVM's Expectation, whether that should mean more interesting kind of investment projects and whether you believe there could be kind of more government support to get there? Thank you.
Thanks, Peter. First of all, this is correct. If we exit Basel, there's no Production of coal in the scope 1 area of EVM anymore. And the second thing is, as you know, The ambitions are quite high for Europe and the global perspective. Of course, we need also framework decisions, yes, which are enabling us And a group like ours, yes, to really have project and to realize the project as we tried to Develop the mission strategy 2030.
We have a clear target here regarding renewable Further developing of renewable capacity in our home province in Lower Austria, and that's the markets of Bulgaria and North Macedonia. What you also have seen and heard is that finally, the parliament has voted on our Renewable Energy Act. But as we have looked to the legal framework, there are around 70 And directives which have to be now developed and put in force by the government. So there's a lot of things to do, which also then define the conditions of doing our investment strategy. And as I've mentioned Before we see good opportunities, we have this kind of average €450,000,000 investment program for the upcoming years.
And if the framework decisions and the guidance which is giving us is more clear on that, I also confident that we even can increase this kind of investment CapEx and still have a very stable balance sheet and financial policy. Thank you for your answers.
The next questioner is Mr. Patrick Steiner of Kepler Cheuvreux. Your line is open.
Good morning. It's Patrick Sanna from Kepler Cheuvreux. Thanks for taking the questions. Just a quick question from my side. You reported the plant commission in the first Section of the cross regional drinking water transport pipeline from Kees to Zapor the year end 2020 When do you expect the pipeline to be finished to quickly?
And what are the expected implications of the drinking water business's fundamentals Once it is finished.
Okay, Peter, that's a very specific question. I can confirm that it's done in Two steps. The first part of it, we hope that we can conclude using this autumn. And the second one, which Then enable that we will use this kind of hybrid stockpile for the year 2024, 2025, always depending on Construction permits and so on. What our vision is here is we want to consolidate the regional watermark On the midterm, by building up not just the connections between existing grids of water This is a kind of high pressure, water pipes.
But also on the quality side, yes, we are constructing these To purify the water and have this kind of high quality water for the lower Austrian Population. So I think this business will grow on the long term because it's a long term investment. And We see EUR 160,000,000 of investment in the upcoming years, part of the overall group's investment.
Next, we have Theresa Schoenfeld of Raiffeisen Bank International.
A follow-up to the renewables expansion act. You mentioned around 70 directives that need to be changed. Do you have already an estimate, a guesstimate on the time line here? That's the first one. The second one is on renewables in Southeast Europe, where we have seen first auctions Or auctions in Northern Macedonia.
If you could tell us a bit more on what's going on there and EVM's role on that? And the third one is and maybe I've missed it, if you could give us A number for the order intake at the moment in the environment business. Okay.
Yes. So this kind of directives, which have to be important, this will be a hell of a work because a lot of the issues Where the coalition partners were not able to find them a consensus now, they put into this kind of directives Further decision by government's ministers, yes? This is one part. The second is part of this Renewable Act Has to be also modified to Brussels, because it has to do with subsidization. Therefore, They need this kind of approval of buses for that.
I'm sure this will take quite a while. This will go into 2020 2. So I would expect that this autumn will be used for this further work on this kind of guidelines. So I think more clearness about really the basis for decision making will be in 2022. This sounds quite a while, but please keep in mind that this is a legal quality of work which has to be done also.
And we will try together with the associations of our industry also to support this because as we all know, there is a big expectation By public stakeholders about the further pursuing of this kind of renewable energy. And on the other hand, we have more and more problems in the legal I expect them. And luckily, we have been actively back, so there is kind of a counter development to this kind of Public target, yes? Nevertheless, yes, EVM has around 100 Megawatt concrete projects in the Pipeline, yes, which are on different levels of the administrative procedures. This will help us to come from this 400 megawatt to this kind of 500 A megawatt midterm, yes, 2023, 2024, 2024, 2025, depending on this decision making of the administrative costs.
And in parallel, we're going to develop photovoltaic. We started this small We plan North Macedonia to get this kind of concrete experience. We participated in a tender there At the end of this business year, hope we will have 3 megawatts installed in North Macedonia, But we are ready to do this. And therefore, we also will be very steady on what kind of independence From state subsidization photovoltaic, is it in the market or not? How is it fitting into our needs of energy consumption As we are also a big street operator there.
So we are looking for an optimum on the level of investment And risk which we can take, and this should add up to around 7.50 megawatts wind on the midterm on the Group level 10 to 30 and of course, 200 megawatts, 300 megawatts of photovoltaic in the region because the Some hours, they are better than here. And what we see, and this is maybe the thing, which is really very Our mix is optimistic. The region and the energy market, the market coupling, yes. So The regional energy market in Southeast is becoming more transparent. The wholesale prices are Much more under pressure of cohesion now, yes?
And this is the basis also for long term investment in the region. And the third question, you mentioned the order book is around €1,300,000,000 at the end of June.
There are no further questions so far. Therefore, I will repeat the key combination. There seems to be no further questions in the queue.
So then, thank you for joining today's conference call. We will publish the results for our 2021 financial year on Thursday, 16 December.