Economy

The year 2007 has brought to Západoslovenská energetika, a.s. a profit of 21,672 million SKK. The final profit has been impacted by the unbundling process which caused separation of ZSE Distribúcia, a.s. and ZSE Energia, a.s. on 1st July 2007.
The average employment number did not exceed 1,340 employees.

Overview of Indicators

	SKK Millions	2007	2006
	Revenues	16,737	26,863
	EBIT (Earnings Before Interest and Taxes)	22,283	4,150
	EBIT – Margin (in %)	133.1	15.4
	EBITDA	22,825	4,901
	EBITDA – Margin (in %)	136.4	18.2
	Profit before taxation	22,372	4,240
	Net Profit	21,672	3,383
	Note: Financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union

Finance in 2007
Západoslovenská energetika, a.s. appreciated its available financial resources in 2007 mainly through repo-transactions and short-term time deposits and earned interest of 111.543 million SKK.

Loans
Západoslovenská energetika, a.s. has an available credit line of 500 million SKK from Citibank Slovakia, a.s. for drawing in SKK or EUR. A new 200 million SKK line of credit is available in Tatrabanka. Lines of credit are also available to the daughter companies ZSE Energia, a.s. and ZSE Distribúcia, a.s. that were used only as bank guarantees.

Profit Distribution
The General Meeting of Západoslovenská energetika, a.s. held on 31st May 2007, approved the proposal for 2006 profit distribution. In June 2007 the Company’s shareholders National Property Fund, E.ON Energie AG and EBRD, London received dividends totalling in 2,836 million SKK. Dividends were paid in Slovak Crowns. The value of one dividend is 477 SKK.

Cost of Financial Activities

	SKK Millions	2007	2006
	Earned interest	124	97
	Paid interest	35	7
	Financial costs/revenues – net	89	90

Trade Receivables and Payables

	SKK Millions	2007	2006	2005
	Trade receivables and other receivables	2,630	2,402	3,793
	of which: overdue	652	1,171	1,480
	Trade payables and other payables	1,827	2,765	3,249
	of which: overdue	19	6	167

Trade Receivables and Payables
Overdue trade receivables have decreased by 44.3% compared to the previous year while the overall number of trade receivables has increased by 9.5 percent.




















Investments
The year 2007 was impacted by the unbundling process which resulted in an increase in uncompleted projects under new ownership of the newly established companies. This process also caused an increase in employee movement among individual companies and individualised assessments of these uncompleted projects.

In 2007 Západoslovenská energetika, a.s. invested 1,285 million SKK. Structure of this investment was as follows:

Investment

	SKK Millions	2007
	Distribution (1st half of 2007)	975
	IT, telecommunication	153
	Facility Management	84
	Other assets and other investments	73
	Total	1,285

	The Most Important Investments by Volume
	From January to June 2007	SKK Thousands
	Distribution building 110/22kV Industrial Park Nitra Sever	277,977
	VHV power line – Industrial Park Levice-Géňa	222,373
	VHV power line – Industrial Park Vráble	214,591
	Distribution building 110/22kV Bošáca - Phase II	122,976

New investments started at the same time were transferred under the ownership of a newly incorporated company ZSE Distribúcia, a.s.
Západoslovenská energetika, a.s. as a supplier to this newly established company, provided investment and construction services.

The significant investment of Západoslovenská energetika, a.s. was:

	The Significant Investment of ZSE
	In the period July - December 2007	SKK Thousands
	Central warehouse Nitra	36,917

Forecast
There is no plan for changes in share capital. The estimate for next year in capital investment and reconstruction works is over 400 million SKK. Due to an increase in the number of construction projects and acquisition of tangible assets, an increase in the value of tangible assets is expected. A slightly expected increase in the amount of economic results will create room for the Company’s future development.

Risk and Uncertainties
Západoslovenská energetika, a.s. provides services in the following areas to its subsidiaries ZSE Energia, a.s. and ZSE Distribúcia, a.s.: customer services, financial services, accounting, controlling, general administrative services and other services. ZSE, being a service company, is not exposed to any serious risks.

Significant Events that Occurred after the End of 2007
Elections for the Supervisory Board of Západoslovenská energetika, a.s. were held on Tuesday, 29th January 2008. A list of candidates from the election results of 129 cast votes was as follows:
1. Silvia Šmátralová - 108 votes
2. Kamil Doman - 89 votes
3. Miroslav Franko - 70 votes

Silvia Šmátralová and Kamil Doman will continue their work in the Supervisory Board for the next three years. Miroslav Franko will replace the current member of the Supervisory Board, Mr. Alojz Bahelka.
After 31st January 2008, the Supervisory Board has the following members: Chairman Milan Chorvátik, Vice Chairman Walter Hohlefelder, members: Silvia Šmátralová, Kamil Doman, Andrej Danko, Ľuboš Majdán, Iveta Pauhofová, Ladislav Jančo and Miroslav Franko.


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