Hidroelectrica reports net profit of 2.69 billion RON, down 32 percent in first half

Hidroelectrica Group records a decrease in operational and financial results for the first six months of 2024 compared to the same period in 2023, with a slight increase compared to the approved budget.

Net profit decreased by 32 percent, from 3,946 million RON to 2,690 million RON.

The Group’s operating margin and net margin decreased by 10 percent and 8 percent, respectively, compared to the similar period in 2023, mainly due to the decrease in electricity production, the quantity of electricity sold, as well as the decrease in electricity selling prices (both locally and in the interconnected European market).

In the first six months of 2024, Hidroelectrica’s results were influenced by the decrease in electricity selling prices, as well as the quantity of electricity sold, leading implicitly to a decrease in revenue from energy sales. A significant contribution of the results of the second quarter of 2024 to the decreases recorded in the first 6 six months is observed, driven in particular by the entry into force, at the beginning of the second quarter (1 April 2024), of the changes to the MACEE mechanism, which led to periods of significant fluctuations in market conditions (prices and quantities traded). This period of market adjustment to the new conditions and regulations overlapped over a dry period, the hydrological conditions limiting the Company’s production capacity.

Generation Energy Sold (Net)

The energy produced and sold (net production) experienced a slight decrease of approximately 22 percent in the first half of 2024 compared to the same period in the previous year, with a quantity of 8,293 GWh recorded from January to June 2024. The decrease was mainly due to the hydrological conditions recorded in the second quarter of 2024, when the average value of the Danube flow (5,585 cubic meters/s) decreased by approx. 25 percent compared to the same period of 2023 (7,491 cubic meters/s).

Wholesale Revenue

Compared to the first half of 2023, the revenues related to transactions concluded on the wholesale market in the period January-June 2024 were impacted by a number of factors determined in particular by the reduction in the flow of Danube, which led to a quantitative decrease in the energy delivered to the networks, as well as by the decrease in the SPOT price (especially in the period February-April 2024), in conjunction with the amendment of the legislation on voluntary trading through MACEE as of April 2024.

Thus, revenues recorded on wholesale markets in the first half of 2024 decreased by 38 percent compared to the same period in 2023. This decrease was driven by several factors: (1) the SPOT price dropped between January and June 2024 compared to the same period in 2023 (approximately 30 percent) and (2) remained below the legal reference price for MACEE transactions in the first four months of 2024; (3) consequently, the suppliers, through OPCOM, did not take over the entire quantity allocated to Hidroelectrica at the annual auction in December 2023 for delivery in 2024 through MACEE.

Supply Revenue related to active energy

The revenues from the electricity supply activity decreased by 32 percent, to RON 1,130 million revenues in the first six months of 2024, from RON 1,660 million revenues in the same period of 2023. This decrease is due to both the decline in the selling price of electricity and the reduction in the volumes supplied in the first six months of 2024 compared to the first six months of 2023.