Electrica - Profit Slumped On High Electricity Prices

Electrica - Instant Earnings Comment

Under revision

Target price (12M): Under revision

 

• Electrica reported 9M/19 earnings today, BMO. Electrica registered a net profit of RON 161 million in 9M 2019, down by 49% YoY, mainly due to a substantial increase in the electricity price. Costs with electricity purchase increased by 32% YoY to RON 2.45bn. Total operating costs increased by 22% and reached RON 4.53 billion. Total distributed electricity quantity increased by only 0.5% YoY.

 

• Bottom line: Electrica posted a net income of RON 52mn/161mn (-49/-51% YoY) for Q3/19 and 9M/19, respectively. We’d been looking for some improvements for H2, but electricity prices jumped due to supply-demand imbalances in the region. Given the recent trend of electricity prices in the region, which has several reasons like extreme climate and the shift toward renewables from fossil energy, we are a bit cautious on EL supply segment’s results until the full liberalization of the Romanian electricity market.

 

 

Gabor Bukta
analyst

CONCORDE SECURITIES LTD.

Alkotás Point
50 Alkotás street, H-1123 Budapest.
Phone: | Mobile:
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MEMBER OF THE CONCORDE GROUP

 

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