Croatia: Energy holding HEP, Semi-annual net profit of 168 MEUR, 20 MEUR only from gas sales in the period April-June

12. September 2014. / SEE Energy News

In the first half of this year HEP Group, with consolidated net profit of 168 MEUR, which is a significant improvement compared to the same period last year when net profit amounted to100 MEUR, according to the consolidated financial statements of the HEP group published at Zagreb stock exchange.

HEP has published a consolidated report according to which the parent company, HEP j. s.c.(joint stock company), in the first six months had a net profit of 182 MEUR, while in the same period last year, net profit was127 MEUR. Explaining the results, they pointed out that the continued stagnation of economic activity and above-average temperatures in the winter months resulted in lower consumption of electricity, heat and gas. However, extremely favorable hydrological conditions, which continued in the first half, allowed the intensive production of electricity from hydropower plants and reduce production in thermal power plants.

The production in hydropower plants was 4.2 TWh, what is by 0.9 TWh less than in the same period last year when it achieved record production. The electricity import was decreased by 0.8 TWh in the first half of the year. Operating income of HEP Group amounted to 853 MEUR in the first half of the year, which is almost by 157 MEUR or 15.5 percent less than in the same period last year. Revenues from electricity sales declined by 135 MEUR or 16.4 per cent, which, together with the impact of falling consumption and the loss of part of the market, is result of the reduction of tariff rates for customers within the universal service (households) and guaranteed supply of November 1st, 2013th, and lower revenues from the electricity export produced in hydropower plants, according to HEP. Revenues from heat sales decreased by 8, 6 MEUR, or 15 percent, due to reduced  consummation by 17.8 percent, while revenues from gas sales are lower by 6 MEUR due to consumption falling by 16.6 percent.

As they recall in the report, HEP has been determined by the Government’s decision as a supplier in the wholesale gas market for the period from April 1st 2014th to March 31st 2017th, in which it will sell gas to the suppliers under controlled conditions for the needs of customers in the category household. HEP group had a profit 20 MEUR from these activities in the period April-June. Operating expenses of HEP Group amounted to 630 MEUR and decreased by 210 MEUR, or 24.8 percent compared to the first half of last year. Besides in HEP note that due to favorable weather conditions, the decrease in consumption , the loss of part of the market, reduction of the fuel price, the procurement costs and electricity production  are lower by 30.4 percent. The decrease in operating expenses were impacted by significantly lower restructuring costs relating to severance payments, provisions for severance payments, which was conducted in 2013th  and which there was not  in 2014th  , and lower personnel costs due to headcount reduction during 2013th . According to the report, investment of HEP group in the first half of the year amounted to 88 MEUR, which includes the replacement, reconstruction, rehabilitation of existing facilities, the construction and preparation of the construction of new energy facilities and connection to consumers, is the conclusion of HEP report.

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