Electrica - The Worst Seems To Be Over
Electrica - Instant Earnings Comment
Under revision
Target price (12M): Under revision
- Electrica reported Q2-H1/19 earnings today, BMO. Electrica reported a net income of RON 150mn for Q2/19, broadly flat compared to Q2/18. Revenues came to RON 1.5bn, primarily driven by supply segment, which was up by 19% YoY on higher selling prices and increasing volume. EBITDA decreased by less than 1% YoY to RON 284mn, amounted to RON 359mn in H1/19. Electrica achieved an operating profit of RON 124mn (-52%) for H1, RON 171mn (-5.5% YoY) for Q2. ANRE amended regulated tariffs applied for distributors for the ongoing 4th regulatory period (effective from 1st of January, 2019) many times in the last quarters. We believe that we will see further improvements in H2, thus we are positive on Electrica at this stage.
- Bottom line: Electrica posted a net income of RON 150mn for the second quarter. Despite that net profit for H1 is still well below H1/18 levels, we are looking for improving operating results for H2 due to higher distribution tariffs.
- We believe that the company will have positive earnings performance in the next quarters. Furthermore, dividend payer utilities, like Electrica, might be more attractive amid lowering yield environment.
Gabor Bukta
analyst
CONCORDE SECURITIES LTD.
Alkotás Point
50 Alkotás street, H-1123 Budapest.
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