By Kakia Papadopoulou
Public Power Corp still suffers the side effects of its chief financial officer resignation Grigoris Anastasiadis on Tuesday, with the stock underperforming the overall market for the third consecutive day on Thursday.
At midday, the stock was down 0.3% amid mild gains of the Athens Stock Exchange general index.
PPC stock has lost an around 1% since Tuesday and registered just 0.1% gains since the announcement of its second half earnings performance on Aug 29 in a soaring overall market. The general index has firmed 3.7% in the respective period.
Poor financial performance, along with the company’s inability to execute the much-touted new business plan were behind Anastasiadis resignation, according to analysts.
Anastasiadis “was a preson of trust and good communication skills for the investment community, “ said Yiannis Stamatakos an analyst with Proton Securities.
Still, local press insist that Anastasiadis resentment with PPC’s decision to form a joint venture with “the total unknown” energy fund ContourGlobal weighed on his decision, according to the Greek daily Eleftherotypia. PPC formed the joint ventute with ContourGlobal last May in a bid to expand its investements activities in the wider area of the Balkans. Both PPC and ContourGlobal will hold a 45% stake in the newly-formed subsidiary, while the European Bank for Reconstruction and Development is in the process of acquiring the remaining 10% stake. ContourGlobal is of US interests.
PPC defended again its decision to cooperate with ContourGlobal only on Tuesday, the day of Anastasiadis resignation.
Among others, PPC repeated that it “has received references for ContourGlobal by large banks like Deutsche Bank and serious law firms in New York,” in a statement on Tuesday.
PPC, which is still state controlled-the state owes 51% stake- and the basic electricity producer in Greece- has suffered a series of management crisis with the number of consecutive high-ranking officials’ resignations taking place the past two years.
However, analysts remain skeptic for the company’s future earnings performance, as its total net profits have declined 35% in the second half of the year in addition to a 53% net profits loss for the whole 2005.
High energy costs along with inelastic internal costs were mainly behind. PPC is heavily overstaffed with only its personnel costs rising 10% in the first half. PPC’s workforce stood at 26,650 employees at the end of the first quarter.
Besides, PPC has to gird for competition in the longer-term. The electricity producer lost its monopoly status in 2001. But it has not felt yet the full impact of the market deregulation. Currently, it holds a 96% chunk in generation and 97% in supply. PPC itself sees the generation market share falling to 91% by 2010.