Austrian utility group EVN said on Wednesday the aggregate effect on its
earnings before interest and tax (EBIT) from impairments in Bulgaria and FYROM
will amount to 260.9 million euro ($356.6 million).
New tariffs in
Bulgaria and FYROM will lead to impairments and negative group result, EVN said
in a press release, adding that 210.1 million euro of the effect on the EBIT
will be attributable to Bulgaria and 50.8 million euro to FYROM.
Due to
these effects, the group's management expects a negative group net result for
EVN Group’s financial year 2013/14.
"In Bulgaria, the tariff for the
period 1 July 2014 to 30 June 2015 foresees a significant increase for EVN
Group's purchase price for electricity," EVN said in a press release. "In
parallel end customer prices were only marginally increased by not fully
reflecting the effective cost base of the respective EVN companies as well as by
introducing a new tariff element the economic effect of which is to retransfer
revenues incurred by EVN Group during previous regulatory
periods."
According to EVN, in FYROM the tariffs for network usage,
effective from July 1, will only marginally increase and end customer prices
will increase below expected levels. Cost elements associated with the next step
in the market liberalization starting with January 1, 2015 were not reflected in
the decision on June 30.
"As a result of such tariff decisions, in
combination with the current economic situation and outlook, mid term
expectations for EVN Group’s operations in Bulgaria and FYROM had to be
reevaluated resulting in impairments of goodwill and customer base in full
(148.9 million euro and 43.0 million euro), a partial impairment of other assets
(15 million euro) as well as a negative net effect resulting from an initial
recognition of a regulatory liability in Bulgaria (54 million euro)," EVN
said.