PPC reports lower losses in Jan-Sept

Public Power Corporation (PPC) on Friday reported lower losses in the January-September period this year compared with the corresponding period in 2018. After tax losses totaled 353.2 million euros in the nine-month period, from losses of 574.6 million in 2018, while turnover rose 3.4 pct to 3.608 billion euros, from 3.489 billion in 2018.

In an announcement, PPC said domestic electricity demand increased by 3.1 pct, while total electricity demand (including exports) was contained to 1.1 pct, due to lower exports from third parties from the second quarter onwards. This reduction in exports was attributed to the Regulatory Authority for Energy’s (RAE) decision to set restrictions on the NOME products that can be exported, resulting in the containment of the NOME quantities that were delivered.

PPC’s average domestic retail market share declined to 76.1 pct, compared to 82.3 pct in 2018, resulting in a decrease in sales by 5.2 pct. PPC’s electricity generation and imports covered 47.2 pct of total demand in the nine-month period, while the corresponding percentage in 2018 was 54.3 pct.

Group turnover increased by 119.3 million euros or 3.4 pct, despite lower sales volume driven by market share reduction. Operating profitability (EBITDA) – adjusted for the Special RES account, the provision for personnel’s severance payment and the settlement of the Renewables levy (ETMEAR) for previous years – was significantly reduced by 73 pct to 96.9 million euros compared to 359.2 million in 2018. Adjusted pre-tax losses rose to 451.2 million euros compared to pre-tax losses of 215.6 million in the same period last year. Total capex reached 508.8 million compared to 528.6 million in 2018. Net debt stood at 3,906.7 million euros on 30.9.2019, an increase of 214.3 million compared to 31.12.2018. PPC is exploring opportunities to access the international debt capital markets, subject to prevailing market conditions.

Commenting on the financial results of the period, Georgios Stassis, Public Power Corporation’s Chairman and Chief Executive Officer, said: “Nine-month 2019 results reflect the continuing negative impact from the higher energy mix expenses which are attributed to the increased fuel prices, the System Marginal Price and CO2 emission allowances prices as well as the increased need for energy purchases and natural gas fired generation in the third quarter of 2019 due to the significant lignite fired generation reduction.”

In addition, he said, “the negative impact of the NOME auctions continued, despite their abolition, since PPC is obliged to deliver previously auctioned quantities until August 2020. A reversal of this situation is expected in the next quarters as soon as the measures decided on September 1, 2019 start to positively impacting the operating profitability of the company.”

Furthermore, he added that the collection of PSOs for previous years has already been legislated and their collection is expected in the first quarter of 2020, thus further improving the liquidity of the company. “At the same time the new law, voted yesterday by the Greek Parliament, paves the way for the removal of certain constrains imposed on PPC as a state-related entity in order to be able to compete on a plain level field,” he noted.

Stassis said that “PPC is already under transformation. Currently, a plan for revitalization and modernization is in effect in order to have a leading role in the challenges that the energy sector is facing. PPC is set to be a healthy entity again.” He said that PPC will present its strategic priorities for the next 5 years in the new Business Plan, which is currently drafted and will be concluded in the coming weeks. “These include: the acceleration of the lignite units decommissioning and the boost of RES investments in order for the group to claim a leading role in the RES sector in the coming years; modernization of the Supply Division, with a new tariff policy and tailor-made product offerings; and digitalization across all business segments (generation, networks, supply).”

“We believe that these strategic priorities will contribute to the evolution of PPC into a modern, strong and profitable company which will add value to its shareholders and customers,” Stassis said.