Greek state-controlled electric utility Public Power Corp. SA (PPC.AT)
said Thursday its second-quarter net profit dropped 60% on falling sales and
rising costs but added it was on course to meet full-year targets.
"Taking into account the developments in demand, sales and estimated
costs, on the basis of first seven months we are on course to meet our budgeted
targets for the full year of 2010," said Chairman and Chief Executive
Arthouros Zervos.
For the three months to June 30, the company reported a net profit of EUR90.4
million. Revenue for second-quarter eased 4.1% to EUR1.40 billion.
The results were below market expectations of EUR102.1 million in net profit,
but broadly in line with revenue of EUR1.39 billion forecast in a Dow Jones
Newswires poll of nine analysts.
Operating income, as measured by earnings before interest, taxes, depreciation
and amortization, or Ebitda, was down 37% at EUR298 million, falling short of
market expectations of EUR315.4 million.
Broker HSBC Pantelakis Securities said the company results missed their
estimates as well as consensus figures on lower demand and higher expenses. Analyst
Paris Mantzavras said: "The results were worse than expected as lower
demand and a worse sales mix hurt the top line, and the bottom line was weighed
down by higher energy and fuel purchase costs in the second quarter as well as
an unfavorable generation mix."
CEO Zervos said that the company's new business plan will be postponed until
after the government decides on how to liberalize the electricity market.
Greece
's
one-time monopoly power company has seen demand slip as the Greek economy falls
further into recession and due to increased competition from rival power
producers.
These problems have been compounded by higher fuel costs, additional expensive
energy purchases as well as an unfavorable euro exchange rate.
At 0906 GMT, PPC shares were up 0.6% at EUR11.98.
The company trades at a price-to-earnings ratio of 6.3 times forecast 2011
earnings and a price-to-book value of 0.4 times. PPC has a market capitalization of about EUR2.85
billion.