Good morning, ladies and gentlemen. Welcome to the conference call on EVN's 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 Szyszkowitz.
Good morning and welcome to the conference call on EVN's results for the first three quarters of the 2020/2021 financial year. EVN showed a sound performance in the reporting period. EBITDA, EBIT, and group net results are above the previous year. The main drivers for these improvements were the earnings contribution from an equity-accounted investees, in particular our supply company, EVN Italia, and development 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 effects. The Corona crisis only had selective negative impacts on our operating results. Our integrated business model and the widely diversified customer base continue to be the stabilizing factors. Our investment levels was high. We were able to increase investments by 27.5%, EUR 356.3 million. This, in line with our commitment to further increase CapEx.
Our plan is to invest on average up to EUR 450 million per year in the future. Of that, up to three-fourths 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 will prove these strategic objectives. They secure supply security, enable a carbon-free energy future, and provide for further growth of our regulated business. Other investment areas are renewable generation, biomass, and drinking water. In wind generation, we make further progress to grow our installed capacity, which is almost 400 megawatts by now. I would like to remind you that EVN is Austria's second -largest wind power producer. A recent increase was made through the acquisition of an existing wind park in Lower Austria with an installed capacity of 18.5 megawatts. Closing of this acquisition took place at the end of June.
To be precise, the group's installed wind capacity is now 394 MW. When we announced our Strategy 2030 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 partners, STEAG, and the consortium of banks to prematurely exit from the hard coal power plant project, Walsum 10, 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 waste power project in Kuwait. Other positive factors included increase in energy sales in Bulgaria and higher to the cooler weather in all three core markets, as well as the higher network tariff set by the E-Control in Austria as of 1st of January, 2021. Contrary factors were lower effects from the valuation of hedges for electricity generation and a decline in revenue from natural gas trading. The main reason for the rise in EBITDA was higher earnings contributions from at equity-accounted investees. Higher investments led to a rise of scheduled depreciation and amortization. In connection with the takeover of an additional electricity procurement hub and an impairment loss of EUR 130 million were recognized on the Walsum power plant already in the first quarter.
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-19 had triggered impairment losses of EUR 14.5 million in the previous year. Based on this development, the group's EBIT was up 2.6% and amounted to EUR 291.9 million. Financial results improved EUR 2.8 million, supported by, among others, the higher dividend from Verbund for the 2020 financial year. In total, we generated a group net result of EUR 224.6 million, which represents an increase by 6.6% over the previous year. 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 770.9 million. Gearing ratio was down to 13.1%. Our financial flexibility is solid.
We benefit from the lower net debt and sufficient committed undrawn credit facilities, which amounted to EUR 531 million as of the end of June 2021. Our strong balance sheet structure forms the basis of pursuing organic growth opportunities in our regulated and stable Austrian activities. Before I will go through each of these segments in detail, 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% year-on-year.
Renewable generation benefited from good water flows, and thermal generation exceeded the lower prior year level. Good water flows 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 EUR 148.8 million. This increase was mainly due to a positive one-off effect related to the takeover of an electricity procurement right, which took place in the first quarter. In addition, there was a re-evaluation of our equity consolidated investment in the Ashta hydropower plant in the amount of EUR 9.6 million. In the previous half year, we had to record an impairment loss of EUR 4.9 million due to higher country risk premiums at that period time. Both effects were driven by country risk premiums at a discount rate. In the previous year, it increased, and this year it went down again.
Scheduled depreciation and amortization increased as a result of higher investment. In total, the generation segment generated a higher EBIT of EUR 88.3 million. 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 EVN's power plants. Besides, it includes the revenue from our domestic heating business. For the first three quarters, higher revenue from the marketing of 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 and 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 takeover and additional electricity procurement right led to a positive one-off effect, which was during the year followed by provisions of onerous contracts. Secondly, there was an increase in procurement costs for our heating business. Finally, there was a reduction in the procurement cost 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 resulted from colder temperatures. Please bear in mind that there was a temporary decline in sales to industrial customers due to COVID-19 in the previous year. In this year, COVID did not have any material negative effects on energy demand. The share of results from equity -accounted investees with operational nature improved by EUR 44.7 million.
This increase was supported by a sound operating performance of EVN KG and positive effect from valuation of hedges. Based on these developments, the energy segment reported EBITDA of EUR 50.7 million and EBIT of EUR 34.7 million. On the next slide, I will present the developments in our network segments. Network sales volumes increased, supported 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-19 in the previous year. This year, there was no material negative effects on the network sales volumes from the COVID-19 pandemic. With the beginning of the new calendar year, the Austrian regulator introduced new net tariffs. Charges 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 development, segment revenue increased by 6.4%. EBITDA in the network segment was up 16.8% and EBIT by 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 had 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 volumes 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 regulated supply business in North Macedonia. In contrast, segment EBIT was slightly up.
As already mentioned, higher country risk premiums for Southeastern European countries due to COVID-19 had triggered impairment losses of EUR 14.5 million 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 EUR 1.3 billion as at the end of June. In total, WTE Wassertechnik is currently working on nine projects in Germany, Lithuania, Poland, Romania, Bahrain, and Kuwait. In addition to our joint venture company, sludge2energy is currently working on three sewage sludge treatment projects in Germany. The financial performance of the segment is in line with the international project business. There was a corresponding rise of both revenue and operating expenses in this segment.
I would also like to note that national lockdowns, travel restrictions, and disruptions in international supply chains caused delays in the international project business. All in all, the segment benefited from the start of the construction of the Kuwait wastewater project, which is accounted for according to the percentage of completion method. In addition, there was a positive one-off effect at our lower Austrian water supply company. In total, these developments led to an increase in EBITDA to EUR 52.8 million and an EBIT to EUR 23.5 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. Gross cash flow was substantially up at EUR 700.9 million. This was mainly due to a receipt of a compensation payment for the takeover of an electricity procurement right.
A further factor was the higher balance of dividends from equity -accounted investees. For a year-on-year comparison, please also bear in mind that last year, the dividend from Verbund AG was only received in the fourth quarter. The increase in cash flow from operating activities was even higher in comparison 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 a 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. A contrary factor was the issuance of a green private placement. The net change in cash and cash equivalents amounted to EUR 63.8 million. 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 group net result in 2021 will be in the range of approximately EUR 200 million-EUR 230 million. The further course of the COVID-19 crisis and the resulting macro effects could have a negative influence on individuals within EVN and, in turn, on the development plans 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 EUR 0.49 per share. I'm 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 star again. We already have one question that comes from Mr. Peter Crampton of Barclays. Please go ahead.
Good morning. It's Peter Crampton here from Barclays. Two questions. First one's short. If you exit Walsum, that should essentially mean then that EVN is coal-free, correct? Then the second question relates to the renewable energy plans of Austria. They're quite aggressive, talking about CO2 neutrality by 2030. I was just wondering EVN's expectation on whether that should mean more interesting investment projects and whether you believe there could be more government support to get there. Thank you.
Thanks, Peter Crampton. First of all, this is correct. If we exit Walsum, there is no production of coal in the Scope 1 area of EVN anymore. 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, which are enabling us, a group like ours, to really have project and to realize the project. As we tried to develop a vision Strategy 2030, we have a clear target here regarding further developing of renewable capacity in our home province in Lower Austria and then markets of Bulgaria, North Macedonia. What you also have seen and heard is that , finally, the parliament has voted on our Renewables Expansion Act.
As we have looked through the legal framework, there are around 70 directives which have to be now developed and put in force by the government. There's a lot of things to do, which also then define the conditions of doing our investment strategy. As I've mentioned before, we see good opportunities. We have this kind of average EUR 450 million investment program for the upcoming years. If the framework decisions and the guidance which is giving us is more clear on that, I'm 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 is Patrick Steiner from Kepler Cheuvreux. Thanks for taking the questions. Just a quick question from my side. You reported the planning commission in the first section of the cross -regional drinking water transport pipeline from Krems to Zwettl the year-end 2021. When do you expect the pipeline to be finished completely, and what are the expected implications on the drinking water business' 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 even this autumn, and the second one, which will then enable that we will use this kind of high pipe, will be in the year 2024, 2025. Always depending on construction permits and so on. What our vision is here is we consolidate the regional water market on the long term by building up not just the connections between existing grids of water with these kinds of high -pressure water pipes but also on the quality side. We are constructing these facilities to purify the water and have this kind of high -quality water for the Lower Austrian population. I think this business will grow on the long term because this a long-term investment.
We see around EUR 160 million of investment in the upcoming years, part of the overall group's investment.
Okay. Thanks very much for it, Stefan.
We have Teresa Schinwald of Raiffeisen Bank International. Your line is open.
Good morning. 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 timeline here? That's the first one. The second one is on renewables in Southeast Europe, where we have seen first auctions in Northern Macedonia. If you could tell us a bit more on what's going on there and EVN's role on that. 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.
Yes, these kinds of directives, which have to be put in place, will be a hell of a work, because a lot of the issues where the coalition partners were not able to find a consensus, now they put into these kinds of directives, further decisions by government, ministries. This is one part. The second is, part of this Renewables Expansion Act had to be also notified to Brussels because it has to do with subsidization. They need this kind of approval of Brussels for that. I'm sure this will take quite a while. This will go into 2022. I would expect that this autumn will be used for the further work on this kind of guideline. 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 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. On the other hand, we have more and more problems in the legal acceptance locally and administrative acts. There is kind of a counterdevelopment to this kind of public target. Nevertheless, EVN has around 100 MW concrete projects in the pipeline, which are on different levels of the administrative procedures. This will help us to come from this 400 to this kind of 500 MW midterm, 2023, 2024, 2025, depending on this decision -making of the administrative courts. Parallel, we're going to develop photovoltaics.
We started this small plant in 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 MW installed in North Macedonia. We are ready to do this; therefore, we also are being very steady. What kind of independence from state subsidization photovoltaic, is it in the market or not? How is it fitting into our own needs of energy consumption, as we also have big grid operator there? We are looking for an optimum on the level of investment and risk which we can take, this should add up to around 750 MW wind on the midterm on the group level, 10 to 30, of course, 200, 300 MW of photovoltaic in the region because the sun hours are way up better than here.
What we see, and this is maybe the thing, which is really makes us optimistic, the region and the energy market. The market coupling. The regional energy market in Southeast is becoming more transparent. The wholesale prices are much more under pressure of cohesion now, and this is the basis also for long-term investment in the region. The third question: you mentioned the order book is around EUR 1.3 billion at the end of June.
Thank you very much.
There are no further questions so far; therefore, I will repeat the key combination. Ladies and gentlemen, if you still have a question to stage, please press nine star on your keypad. There seem to be no further questions in the queue.
Well, thank you for joining today's conference call. We will publish the results for our 2020, 2021 financial year on Thursday, the 16th of December. Please join us then again and stay healthy, and goodbye.