Electrica posts net loss of RON 41 million for Q1 2019 on rising electricity prices

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Electrica posts net loss of RON 41 million for Q1 2019 on rising electricity prices

The total operating revenues of the Electrica Group in the first quarter of 2019 amounted to RON 1.62 billion, an increase of 17 percent or RON 237 million compared to the same period of 2018. The electricity transporter recorded a net loss of RON 41 million, as a result of rising costs for the purchase of electricity.

In the distribution segment, revenues increased by 4.5 percent as a result of the increase in the distributed share by 0.5 percent, the increase in average distribution tariffs and the increase in network investment values, in line with the applicable accounting policies, in Q1 2019, compared to Q1 2018.

In the supply segment, revenues increased by 22.2 percent as a result of the 6 percent increase in both the amount of energy supplied on the retail market and average sales prices as well as the development of the supply activity natural gases.

Consolidated costs for the purchase of electricity increased by 34.2 percent, to RON 996 million in Q1 2019, as a result of the increase in OPCOM trading prices.

This development was felt in the distribution segment by increasing the cost of electricity purchased to cover network losses by 26 percent. Thus, the positive effect generated by the decrease of the required quantity compared to T1 2018 was canceled by the increase in electricity purchase prices, which were significantly higher than the ex-ante price approved by ANRE for the distribution companies in the Electrica Group for coverage of network losses. These differences may, however, be recovered, at least in part, through the distribution tariffs in the following periods, in accordance with the provisions of the 4th Regulatory Methodology.

Also in the supply segment there was an increase of 25 percent in purchases of electricity, as a cumulative effect of the increase in the purchase price and the amount of electricity purchased. The supply margin was negatively affected, mainly because, through tariffs approved by ANRE, the price recognized for the first two months of 2019 on the regulated segment does not cover the actual purchase price of the electricity actually produced. However, by GEO no. 114/2018 established the legal framework for the recovery of electricity purchases for 2018 and 2019 in the following periods from 1 March 2019 to 28 February 2022.

EBITDA consolidated at Group level decreased by RON 117 million compared to the same period last year, mainly as a result of the negative change in the energy margin, on both main business segments, as presented above.

The Group’s operating profit (EBIT) decreased by RON 128 million compared to the same period last year, adding to EBITDA the impact of depreciation expense, an increase of RON 11 million, following the application of a new accounting standard starting in 2019, but also as a result of the volume of investments put into operation.

In the first three months of this year, Electrica Group posted an unaudited consolidated unconsolidated net loss of RON 41 million, down by RON 100 million compared to 2018.

The post Electrica posts net loss of RON 41 million for Q1 2019 on rising electricity prices appeared first on Business Review.

Electrica posts net loss of RON 41 million for Q1 2019 on rising electricity prices

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