EBT in 1H 2010 amounted to € 463.6 m, compared to €
636.3 m in 1H 2009,
a decrease of € 172.7 m (-27.1%), while net income
amounted to € 347.9 m,
versus € 475.2 m respectively, a reduction of € 127.3
m (-26.8%).
Turnover reached € 2,894.5 m versus € 2,990.3 m in 1H
2009, a reduction of
€ 95.8 m (- 3.2%). From the implementation of IFRIC
18, PPC recognized
in the 1H 2010 turnover, additional revenues of € 101.3
m representing
network users’ contributions for connections to the
network. For comparison
reasons, the respective magnitude in 2009 was € 79.4
m.
Electricity sales in the domestic retail market
decreased by 842 GWh
(-3.3%), while the corresponding revenues declined by
4.9%.
In 1H 2010, PPC’s electricity generation including
electricity imports,
covered 78% of total demand, while, the corresponding
percentage in 1H
2009 was 85.8%, a reduction of 2,950 GWh. The
respective percentage in
the Interconnected System, being the market segment
mainly open to
competition is 77% versus 85.4% the previous year.
Τ
hird parties thermal generation increased by 1,145
GWh, from 359 GWh in
1H 2009 to 1,504 GWh in 1H 2010 an increase of 419%. At
the end of 1H
2010, were added 435 MW of an independent power
producer.
Third party electricity imports increased by 35.1%
from 2,292 GWh in 1H
2009, to 3,097 GWh in 1H 2010.
Concerning RES generation, PPC RENEWABLES generated in
1H 2010
133 GWh compared to 109 GWh in 1H 2009, an increase of
24 GWh
(+22%). RES generation from third parties amounted to
1,831 GWh in 1H
2010, compared to 1,610 GWh in 1H 2009, an increase of
221 GWh
(+13.7%). Pre tax profits of PPC RENEWABLES amounted
to € 5.8m
versus € 2.5 m in 1H 2009.
Electricity generation from lignite, decreased by
1,961 GWh versus 1H 2009,
while the percentage participation of lignite in the
total energy mix of PPC,
decreased to 47.2% from 52% last year.
In 1H 2010, 30.4% of the Company’s total revenues were
expensed for
liquid fuel, natural gas, energy purchases and CO2
emission rights, marking
an increase compared to the corresponding 1H 2009
figure, which stood at
28%.
The expenditure for liquid fuel, natural gas and
energy purchases increased
by € 67.2 m, an increase of 8.7% compared to the
corresponding period of
last year.
Following the implementation of Laws 3833/2010 and
3845/2010, total
payroll reduction, including capitalized payroll in 1H
2010 is estimated at
€ 85-90 m. The EGM of
26 April 2010
, decided to extend an extraordinary
one off financial assistance to PPC’s Personnel
Insurance Organizations, of
an amount up to the payroll reduction provided for in
Article 1 of Law
3833/2010. Consequently, an estimated amount of € 52.1
m has been
charged to 1H 2010 financial results, while based on
certain assumptions
concerning the number and categories of hirings and
retirements as well as
overtime, shift work etc, it is estimated that a
corresponding amount will
impact 2H 2010 results.
With the onset in 2Q 2010 of the hirings provided for
in the relevant
Procedure (1/2007), 330 employees were hired in 1H
2010. Ο
n the other
hand, 956 employees retired in 1H 2010 resulting in a
reduction of 626
payrolls compared to 31.12.2009. With respect to
30.6.2009, the number of
payrolls decreased by 1,252 employees.
Due to the suspension of the Fuel Clause Mechanism as
of August 1, 2010,
the 3Q and 4Q 2010 impact is estimated, according to
the current level of
fuel prices, at € 50m approximately.
ΕΒΙΤ
DΑ
amounted to € 821.1 m in 1H 2010 compared to € 978.3
m in 1H
2009, reduced by € 157.2 m (-16.1%). ΕΒΙΤ
DΑ
margin reached 28.4 %,
compared to 32.7 % in 1H 2009.
Operational cash flow decreased by € 115 m, compared
to the corresponding
figure in 1H 2009.
Commenting on the financial results of the period,
Arthouros Zervos, Public Power
Corporation's Chairman and Chief Executive Officer,
said:
«Despite the decline in EBITDA by 16.1% compared to
the corresponding period
of last year, profitability in the 1st half of 2010 was
at satisfactory levels with the
EBITDA margin reaching 28.4% and net income amounting
to €347.9 million. The
reduction in the 1H 2010 profitability is attributed
to the reduction in the revenues
from energy sales, due to the loss of market share and
lower demand, as well as in
the increase in the cost of the energy balance due to
higher quantities of energy
purchases and the significant increase of fuel prices,
which were not fully offset by
the decline in demand.
PPC’s profitability in 2010 contributes to the
realization of significant investments
throughout
Greece
, estimated at € 1.3 billion for the whole year which
support the
general economic development. At the same time, PPC
contributes to the national
effort for fiscal consolidation having secured direct
revenues for the
Greek
State
of €
118 million through dividend and € 203 million through
income tax.
The profitability generated by PPC in 2010 is not
attributed to tariff increases (the last tariff increase was implemented in
July 2008).
On the contrary, the fact that distortions in the
tariff structure continue to exist until
today, despite PPC’s repeated proposals for the
lifting of these distortions, resulted
in the intensifying loss of market share in the high
margin customer segments.
Specifically, whereas, according to our estimates, in
the 1st quarter of this year
electricity sales by competition were 246 GWh, this
magnitude in the 2nd quarter
is estimated at 414 GWh and this trend is intensifying
in July.
Consequently, it is not correct to focus on the total
retail market share of PPC which,
from 99.8% in the 1st half of 2009 seems to decline by
only 2.4 percentage points to
97.4% in the 1st half of 2010. Since competition, as
expected, is active only in
attracting customers with high profit margins by
offering discounts which, until
today, PPC is not allowed to offer, the comparison
should be made only on the
specific share. Thus, while in the 1st half of 2009
PPC’s share in this segment is
estimated at 99.3%, in 2010 this share is estimated to
have declined by 7.8
percentage points to 91.5%. The respective percentage
in the Interconnected System,
which is the market segment exposed to competition, is
estimated at 90.4%
compared to 99.2% last year, a reduction of almost 9
percentage points.
Ο
n the other hand, in 1H 2010, PPC’s electricity
generation including electricity
imports, covered 78% of total demand, while, the
corresponding percentage in 1H
2009 was 85.8%.The respective percentage in the
Interconnected System, being the
market segment mainly open to competition is 77%
versus 85.4% the previous year.
With respect to the full year prospects, taking into
account the trends in demand and
PPC sales as well as the estimated energy balance and
payroll costs, based on
7month data, full year pre tax profits are expected to
be close to the budgeted levels.
With respect to the updating of the Group’s Strategic
and Business Plan, it will be
completed after the announcement by the State of its
plans in relation to the
liberalization of the energy market in the framework
of the Memorandum of
Understanding .
Finally, as I have already stated, environmental
policy constitutes one of our key
priorities. In this framework, we proceeded with our
plan of decommissioning old
and polluting units, by withdrawing Unit I of
Ptolemaida, which was put into
operation in 1959. At the same time, we are going
ahead with our investment
programme for upgrading our generation fleet and
network infrastructure as well as
with respect to the development of renewable energy
sources, also through the
evaluation of new partnerships
.»
ANALYSIS OF
FINANCIAL RESULTS
REVENUES
Revenues from electricity sales, including exports,
decreased by € 135.4 m (-4.9%),
from € 2,742.9 m in 1H 2009, to € 2,607.5 m, as a
result of the decrease in the
volume of sales by 3.3% (860 GWh), mainly due to the
estimated loss of 7.8
percentage points of market share in the categories of
high profit margin customers and the decrease in total electricity demand by 2.6%.
This trend has intensified in
July. The reduction in the volume of sales is analysed
as follows:
> The reduction of sales to the industrial sector
by 0.8 %.
> The reduction of residential sales 2.3 %.
> The reduction of sales to the commercial sector
by 8.2 %.
> The reduction of sales to other uses by 3.8 %.
OPERATlNG EXPENSES
Despite the decrease in payroll expenses between 1H
2010 and 1H 2009 by € 76.5
m, operating expenses, excluding depreciation,
increased by € 61.4 m (+3.1 %),
from € 2,012 m in 1H 2009 to € 2,073.4 m, mainly due
to the increase in the
expenditure for fuel and energy purchases and to the
contribution of € 52.1 m to
PPC
S.A.
Personnel Insurance Funds.
Specifically:
The combination of the decrease in power generation
from natural gas by
579 GWh, with the increase in natural gas prices by
10.9 % resulted in an
increase in the relevant expenditure by € 4.6 m (+
2%), from € 227.8 m in
1H 2009 to € 232.4 m in 1H 2010.
Electricity generation from liquid fuels reduced by
1,326 GWh (-36.4%)
compared to 1H 2009, while the partial substitution of
diesel generation by
heavy fuel oil continued on the islands. On the other
hand, heavy fuel oil
and diesel oil prices increased by 57.4% and 38.9%. The
expenditure for
liquid fuel increased between the two periods by € 5.8
m (+2.1%) from €
271.7 m in 1H 2009 to € 277.5 m. The expenditure would
have been
reduced by € 6.1 m compared to the corresponding
period of 2009, if the
Special Consumption Tax for diesel had not been
increased (an impact of €
11.9 m on the financial results).
Despite the decrease in PPC import prices by 27.2% and
the decrease of
PPC imports by 342 GWh (-25.4%), the purchase of
greater quantities of
energy from the System and the Network by 1,744 GWh
(+56.3%) as well
as the increase of the System Marginal Price by 3.5%
resulted in the
increase in the expenditure for energy purchases by €
56.8 m (+20.7%)
from € 273.9 m in 1H 2009 to € 330.7 m.
The decrease in C02 emissions rights deficit led to a
reduction of € 24.7 m
in the relevant expenditure in the 1H 2010 compared to
1H 2009 from € 39
m to € 14.3 m.
Payroll expense between the respective 6M periods of
2009 and 2010, was
reduced by € 76.5 m, mainly as a result of the
implementation of Laws
3833/2010 and 3845/2010 and personnel retirements.
These factors greatly
offset the impact of the carry over of payroll
increases in 2H 2009 and
personnel hirings in 1H 2010.
5
Provisions for bad debt, litigation and slow moving
materials reached € 61.3
m, an increase of € 28.5 m (+86.9%) compared to 1H
2009, an increase
attributed by € 23,7 m to increased provisions for bad
debt.
Depreciation expense in 1H 2010 amounted to € 291.6 m
compared to €
262.1 m in 1H 2009, an increase of € 29.5 m (+11.3%). In
2009, the Group
assigned an independent firm for the appraisal of its
property, plant and
equipment at
December 31, 2009
fair values. The results of the appraisal
have been recorded in the financial statements of
December 31,
2009
. The
new appraised values are depreciated from
January 1,
2010
.
The share of profit in associated companies amounted
to € 1 m in 1H 2010
and is the result of profit from PPC RENEWABLES'
participation in its
associated companies, while the respective magnitude
in 1H 2009 was € 0.6
m.
Net financial expenses decreased by € 20.1 m (-24.8%),
from € 81.2 m in 1H
2009, to € 61.1 m, mainly due to the decrease of
reference interest rates and
a lower level of net debt.
Capital expenditure amounted to € 489.6 m compared to €
489.8 m in 1H
2009. Specifically, the composition of 1H 2010 capital
expenditure, was the
following:
> Capital expenditure for mines: € 52.6 m.
>Capital expenditure for generation projects: €144.2
m.
>Capital expenditure for transmission projects: €
42.9 m.
>Capital expenditure for distribution projects: €
242.6 m.
>Other capital expenditure: € 7.3 m.
Net debt amounted to € 3,954 m, a decrease of € 102.3
m compared to
31/12/2009 (€ 4,056.3 m) and a decrease of € 293.6 m,
compared to
30/06/2009 (€ 4,247.6 m).
FINANCIAL RESULTS
OF THE PARENT COMPANY
Turnover: € 2,885.6 m.
EBITDA : € 814.2 m.
EBT : € 455 m.
Net
income : € 340.6 m.