Electrica posts net profit of 102.1 million RON, down 28.3 percent in the first half of 2024

The net profit of Electrica for the first six months of 2024 registered a decrease of 40.3 million RON, reaching the value of 102.1 million RON, from 142.4 million RON in the first half of the previous year (down 28.3 percent), according to a company release.

Alexandru-Aurelian Chiriță, CEO Electrica, said: “In the first half of the year, the Electrica Group recorded a 6 percent increase in EBITDA compared to the first half of 2023, being the result of solid strategies to optimize operations, especially in the distribution segment, where revenues increased by 15 percent, supported by the increase in regulated tariffs and the increase in the volumes of distributed electricity. The operating profit is similar to that of the 1st semester 2023, but the net profit registered a decrease as a result of the unfavorable dynamics of the supply market.

We remain focused on the main priorities, investing in the modernization of the distribution infrastructure and, at the same time, having a strong focus on the implementation of measures aimed at stabilizing the results and generating sustainable growth in the long term.”

In the first six months of 2024, at the level of the Electrica Group, EBITDA recorded an increase of 6 percent, respectively of 35.0 million RON, reaching a value of 614.7 million RON, compared to the value of 579.7 million RON achieved in the first six months of 2023. The increase in EBITDA was mainly generated by the operational performance of the distribution segment, against the background of the increase in revenues from electricity distribution by approximately 292.0 million RON (or 15.0 percent), to the value of 2,244.4 million RON, from 1,952.4 million RON in 2023.

The operating profit recorded is kept at the same level compared to the same period of the previous year at a value of 322.8 million RON in 2024, respectively 322.5 million RON in 2023.

In the distribution segment, revenues increased by approximately RON 292.0 million (or 15.0 percent), to RON 2,244.4 million, from RON 1,952.4 million in the first half of 2023, mainly from tariff increase (we remind you that in Q2 2023 distribution tariffs increased by approx. 20 percent (26.1 percent MN area; 21.5 percent TN area and 10.9 percent TS area) compared to the tariffs in Q1 2023 by Order ANRE No. 27/2023, and as of January 1, 2024, the tariffs were increased by approximately 5.8 percent compared to those in Q2 2023), to which is added the increase in electricity volumes distributed with approx. 4.9 percent, as well as the increase in revenues recognized in accordance with IFRIC 12 (recognized on the basis of the stage of execution of works, according to the accounting policy on the recognition of network investments in connection with concession agreements). The contribution of the electricity distribution segment to the Group’s consolidated revenues is 29.6 percent.

Regarding the supply segment, revenues decreased in the first half of 2024 by approximately 757.2 million RON (or 20.5 percent), to 2,937.8 million RON, from 3,694.9 million RON in 2023, this variation being mainly generated by the decrease in electricity sales volumes by 3 percent) and by the decrease in the cost of purchasing electricity by 49 percent, in the regulatory context explained below. The decrease in the cost of acquisition was manifested in the forward and Day-Ahead Market (PZU). This decrease also propagates in the decrease in income from the sale of electricity and the decrease in income from subsidies (by approx. 74 percent – electricity) because, according to GEO 27/2022, with subsequent amendments, the final price invoiced to customers is represented by the minimum value between the capped price, the contract price and the final price calculated with the cost plus method (respectively purchase cost realized + supply component). The contribution of the supply segment to the Group’s consolidated revenues is 69.7 percent.

On June 30, 2024, the estimated amount for subsidies was RON 2,461.5 million (December 31, 2023: RON 2,614.5 million). Of the amount of subsidies to be collected, the amount of RON 1,903.1 million represented uncollected claims submitted to the state authorities (of which RON 1,278.8 million – the amount estimated to be received from the Ministry of Energy, respectively RON 624.3 million from the Agency Payments and Social Inspection County) and 558.4 million RON representing requests that had not yet been submitted to the state authorities until June 30, 2024. Between July 1 and August 5, 2024, subsidies in the amount of 1,283.7 million were collected RON.