REG - Soc EnergElectricaSA - 2022 1st Quarter Results

Societatea Energetica Electrica SAAnnouncement

13/05/2022 16:45

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RNS Number : 5061L  Societatea Energetica Electrica SA  13 May 2022

Electrica Group - Results for Q1 2022

 

Evolution of the main indicators in the first quarter of 2022:

§ EBITDA - negative in the amount of RON 51 mn., a decrease of RON 250 mn.
compared to Q1 2021

§ Net result - loss of RON 158 mn., decrease of RON 216 mn versus Q1 2021

§ The volume of distributed electricity decreased by 1.1%

§ The volume of electricity supplied on the retail market decreased by 3.9%

 

The main results are presented below and are extracted from the consolidated
condensed interim financial statements not reviewed nor audited as of and for
the period ended 31 March 2022:

 Operating income          3,258    1,729    1,529
 Operational expenditure   (3,433)  (1,652)  (1,781)
 EBITDA                    (51)     199      (250)
 Operating profit          (175)    78       (253)
 Net profit of the period  (158)    58       (216)

The main factors that influenced the results in the first quarter of 2022:

The operating income of the Electrica Group registered an increase of RON
1,529 mn. of which:

- the revenues from the supply of electricity and natural gas on the supply
segment increased by RON 818.3 mn. mainly by the net effect of the increasing
of the retail prices on the retail market by 116% and reducing the amount of
energy supplied on the retail market by 3.9%;

- RON 632 mn. represents the subsidies recoverable from the Ministry of Energy
by the supply subsidiary, as a result of applying the mechanism of capping the
prices for electricity and natural gas approved by Order no.118/2021 with
subsequent amendments and Order no.27/2022;

- increase by RON 97,5 mn. of revenues from the distribution segment, of which
approx. RON 75,5 mn from the increase of distribution tariffs on average by
8.6%, compared to Q1 2021, and RON 22.0 mn. income from the recognition of
network investments in connection with concession agreements.

In Q1 of this year, the Group recorded a good performance on the supply
segment with a net profit of RON 151 mn. and positive EBITDA of RON 187 mn.
(31.03.2021: net profit of RON 28 mn. and positive EBITDA of RON 36 mn.),
mainly due to the increase in electricity sales prices (e.g.:  on the retail
market there was an increase of the selling price by 116%).

On the distribution segment, however, the result recorded in the first quarter
is a net loss of RON 307 mn., a significant negative impact being from the
average purchase price of electricity for NL with 136% higher than the value
set by ANRE ex-ante in tariffs generating additional costs of RON 384 mn.,
costs that will be recovered in future tariffs in a period of up to 5 years
after 31 March 2023 based on GEO 27/2022. Considering these aspects, the
recovery of the price from the NL in the amount of RON 384 mn.  also puts the
distribution segment in a favorable perspective.

Statement of Corina Popescu, CEO of Electrica S.A.:

"Both internal and external situation in the energy market within last year
and a half has had and continues to have a major impact on all players in the
market. In the first quarter of 2022, the company's financial results
continued to be influenced by the high prices for the acquisition of
electricity on the OPCOM markets, as well as the successive legislative
changes that generated important changes in the invoicing system, with an
impact in revenues, especially on the supply area.   The efforts of the
Electrica Group materialized in specific measures for each area of activity,
led to a financial recovery, in Q1 2022, proving that Electrica Group it
remains a stable and credible player by its ability to adapt quickly to the
conditions of an extremely difficult market.

 

In the supply area, the company had to manage the impact of the measures
granted by the authorities through the aid schemes provided by GEO 118/2021
and GEO 27/2022 regarding the capping, offsetting and exemption certain
categories of consumers and finding the best ways to reduce the losses
generated by the instability of the energy market.

 

In the distribution area, DEER continues the ambitious investment program
carried out since the beginning of the previous regulatory period, aiming at
modernizing the network infrastructure and accelerating the expansion of smart
metering on a large scale, which also depends on the economic and geopolitical
context, factors that can influence the capacity of production and delivery of
equipment necessary for investments.

During the first quarter of 2022, DEER has carried out five projects with a
total value of approximately 60 million euros, financed from European funds -
the Large Infrastructure Operational Program, with an eligible value of
approximately 49 million euros, aimed to modernize the transformation
stations, digitization, implementation of smart meters and specialized
informatics systems, for network assets management as well as of the
measurement groups.  The projects are carried out as multiannual investments,
their completion being foreseen for the end of 2023.

 

The evolution of the energy market and the costs of purchasing energy to cover
its own technological consumption have influenced, however, the financing
capacity of the company both for the execution of investments and for the
insurance of working capital. The fulfilment of the strategic objectives
depends on the stabilization of the market and the updating of the specific
legislation at national level.

In the area of services, Electrica Serv continued its efforts to achieve the
Group's objective aimed at contributing to sustainable development, in the
context of the European Green Deal, and implemented a series of projects
representing the installation of photovoltaic plants. In the first quarter of
the year, 5 photovoltaic power plants with an installed power of almost 2 MWp
were completed and put into operation, and for the next period we will
continue the development of this new business line.

Therefore, in a difficult context and in a period marked by volatility, we
have adopted a series of measures to prepare the Electrica Group to act more
agilely and resilient, on all business lines to to keep its position as a
partner that constantly acts in the interest of customers and investors,
regardless of the disturbances generated by factors external to the company."

Starting with 13 May 2022, 18:30 (Romanian time), the condensed consolidated
interim financial statements as at and for the three-month period ended 31
March 2022 prepared in accordance with the International Accounting Standard
34 - "Interim Financial Reporting", as adopted by the European Union, and the
Board of Directors' consolidated report for Q1 2022 will be available, in
Romanian and English, in electronic format, on Electrica's website, at
www.electrica.ro, in the "Investors > Results and Reports > Financial
Results" section, at
https://www.electrica.ro/en/investors/results-and-reports/financial-results/
(https://www.electrica.ro/en/investors/results-and-reports/financial-results/)
. The above-mentioned documents could be also available, in hardcopy, at the
Company's headquarters in Bucharest, 9 Grigore Alexandrescu Street, District
1, which is open from Monday to Thursday between 08:00- 17:00 (Romanian time),
and on Fridays between 08:00-14:30 (Romanian time), excepting the legal
holidays.

 

*The amounts are rounded to the nearest million

 

CEO
 
 

Georgeta Corina
Popescu

 The report can also be consulted at the link below

http://www.rns-pdf.londonstockexchange.com/rns/5061L_1-2022-5-13.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5061L_1-2022-5-13.pdf)

 

 

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