By Kakia Papadopoulou
Greece’s Public Power Corp or PPC reported one of the worst set of earnings in its recent history on Tuesday with its full-year net profits recording a 83% drop, sharply below analysts estimates.
Net profits in 2006 were EUR22.1 million versus EUR129.8 million in 2005. Analysts surveyed by local media had seen net profits standing at EUR70 million.
The company blamed the higher oil and gas prices in 2006 and the increased cost for energy purchases.
“Fuel prices burdened the balance sheet by EUR263.6 million while the energy purchases reached EUR523.8 million compared with EUR240 million in 2005.”
In contrast revenues rose by 11.6% to EUR4.79 billion from EUR4.29 billion in 2005.
Earnings before interest, tax, depreciation and amortization fell to EUR739.7 million from EUR900.7 million in 2005.
Personnel costs were up 7%
PPC said that tariff adjustments by 3.2% in September of 2005 and 4.8% last August were not enough to counterbalance the rising energy costs and the company’s expenses.
It is a common belief that it will be hard for the state-controlled electricity producer to keep its head above the water considering the state interference in matters like tariff regime and human resources status.
Development Ministry’s move to increase the industrial tariffs by 4% and the off-peak electricity tariffs by 5% yesterday, are seen as half-measures, although some analyst reckon that the move is preparing the ground for other increases to follow suit soon.
Midway through the session, the stock was down 1.7% at EUR19.80.