Romania's Hidroelectrica H1 Net Profit Falls 11% Y/Y

Romanian majority state-owned hydro power producer Hidroelectrica said on Thursday that its net profit fell by an annual 11% to 806 million lei ($197 million/167 million euro) in the first half of 2020.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 26% year-on-year to 1.251 billion lei, while operating income shrank by 23% to 1.823 billion lei, Hidroelectrica said in a first-half financial report.

"Operating income decreased in the first half of the year due to low water levels and lower average selling price due to the effects of COVID-19, as well as due to the fact that Hidroelectrica was forced to sell more electricity on the regulated market compared to the first half of 2019 and at an even lower price. This situation has also led to lower operating costs," the company said.

Hidroelectrica posted a turnover of 1.87 billion lei in January-June, down 23% compared to the corresponding period of 2019.

Electricity output in the first six months of 2020 amounted to 7.136 TWh, down 23% on the year.

Hidroelectrica's investments exceeded 53.5 million lei during the January-June period of 2020, up by an annual 32%.

The company had 3,394 employees at end-June, down from 3,428 at the end of last year.

The company's net profit fell by an annual 29% to 1.386 billion lei in 2019.

In July, Hidroelectrica CEO Bogdan Badea said that the planned initial public offering (IPO) of the company could take place a year after all legislative hurdles are removed. Hidroelectrica's IPO is currently on hold after parliament adopted a bill suspending the sale of state-owned shares for two years.

The energy company exited insolvency In April 2017, which paved the way for its listing on the Bucharest Stock Exchange expected to be the biggest in Romania’s history. The initial public offering of a 10% or 15% stake in Hidroelectrica is expected to raise up to 1 billion euro, the court-appointed administrator of the company said at the time.

In June, Hidroelectrica received its shareholders' approval for an ambitious 26.04 billion lei (5.8 billion/$5.3 billion euro) investment programme until 2037 featuring plans for new power generation facilities using wind, solar and biomass energy sources, as well as upgrade or completion of existing production facilities. Out of the total sum planned to be invested, 10.8 billion lei is expected to come from the IPO.

Hidroelectrica is 80.06%-owned by the Romanian state, while investment fund Fondul Proprietatea owns 19.94%. The company has in its portfolio 209 hydro power plants with a total installed capacity of 6,482 MW.

(SeeNews, August 20, 2020)

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