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Romania: Electrica Group reports 38% drop in profit amid supply segment losses and market challenges

Electrica Group reported a net profit of €61.6 million for the first nine months of 2024, a 38% decrease compared to the €100 million profit recorded during the same period in 2023. The company attributed this decline primarily to a negative impact of €89 million from the electricity supply segment. This segment shifted from a profit of €16 million in the first nine months of 2023 to a loss of €73 million in 2024. However, this was partially offset by a €55 million positive effect from the electricity distribution segment, which saw its profit rise from €76 million in 2023 to €132 million in 2024.

EBITDA for Electrica Group amounted to €216 million, down 10.5% compared to €241 million in the same period last year. This decline was mainly driven by reduced revenues and other income from the supply segment, which experienced an unfavorable impact of €515 million, including €350 million in subsidies to be recovered from the Ministry of Energy due to electricity price caps. This was somewhat offset by a favorable impact from a €450 million reduction in the cost of purchasing electricity in the same segment.

Operating profit stood at €127 million, reflecting a 21.9% decrease compared to the same period last year, primarily due to the underperformance of the supply segment. Electrica’s CEO, Alexandru Chirita, noted that the results reflect the challenges posed by a dynamic economic and regulatory environment but also highlighted the company’s commitment to tackling these challenges with a strategic approach. He emphasized Electrica’s increased investments and progress in implementing its strategy, including expanding its renewable energy portfolio and completing the Vulturu project, which are key steps in supporting the energy transition.

The company remains focused on streamlining operations, expanding its regulated asset base, and enhancing resilience amid market challenges. Electrica also underscored its commitment to high-quality service, with increased volumes of distributed electricity and significant investments in infrastructure modernization, benefitting nearly 4 million consumers.

In the distribution segment, revenues rose by approximately €52 million (+8.1%) to €689 million, up from €616 million in the first nine months of 2023. This growth was primarily driven by tariff increases. Starting January 2024, tariffs rose by approximately 6.8% compared to Q2 2023, along with a 5.1% increase in distributed electricity volumes, contributing positively to revenue. The electricity distribution segment now accounts for 29.2% of the Group’s consolidated revenues.

In the supply segment, revenues decreased by 15.2%, totaling €927 million, mainly due to a 41% reduction in the purchase cost of electricity. This led to lower subsidies and adjustments in subsidy recovery calculations following new guidelines from the National Energy Regulatory Authority (ANRE).

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