Croatia: Power utility company HEP expects a growth of investments and incomes in 2013, 500MUSD bonds investors optimistic

, SEE Energy News

Considering the fact that Croatian national producer of electricity HEP presented a report on performance of results to investors, after which company successfully issued 500m USD of Eurobond last year, we decided to give a short look to business in 2012.

HEP Group has accomplished 14.019,9 m HRK of business incomes which is an increase of 6,4% with reference to 2011. Increase of business incomes is the result of electricity sale incomes’ growth by 8,0% because of approved increase of prices for regulated activities from 1 May 2012, and use of new methodology for calculating the price to HEP’s privileged buyers since 1 August and new methodology for bigger sale abroad (for 270 GWH).

Very bad hydrological conditions with decreased water inflows that lasted almost the whole 2011 have continued to the last quarter of 2012. Lacking electricity amounts for buyers’ needs were provided at market what required significant financial assets, especially because price of electricity had increased by 6,8% with reference to last year, on foreign market. Because of increase of average prices of natural gas for 31% and fuel oil for 23% with the reference to the previous year and optimizing costs of production and electricity supply, production of power plants is lower for 8,7%.

Mentioned factors contributed the incomes’ growth for 7,2% with reference to last year and that resulted with EBITDA’s fall from 2.215,9 m HRK to 2.127,7 m HRK i.e. lower margin for 170 bps to 15,2%. However, net income was expressed with significant improvement from 7,8 m HRK in 2011 to 62, 5 m HRK in 2012, with 23,2% lower net financial expenses.

The company expects more detailed incomes’ increase in 2013 with similar dynamics like in 2012 considering the price increase for regulated activities while electricity consumption should stay the same. Besides, company expects little lower height of expenses and it plans investments of 2,4 billion HRK.

Source: Serbia Energy See desk/HEP