The business results of the Electric Power Company of Serbia (EPS) for this year show that the state-owned company has drastically recovered after last year’s loss of EUR 628 million.
In the first nine months of this year, EPS ended with a surplus of EUR 745. The result was two and a half times better than planned, as a profit of EUR 291 million was expected. Judging by the results for the first three quarters, there is no doubt that EPS will end the year with a profit.
The analytical team states that the good EPS result in the first nine months of this year was influenced by increased production in hydropower plants, the sale of excess electricity on the stock market, as well as lower costs for the purchase of coal, which were much higher in the same period last year.
They indicate that for the first nine months of this year, the total revenue from sales, which amounted to EUR 2.5 billion, was higher by 32 percent compared to the same period of the previous year when EPS earned EUR 2.2 billion.
Analysts point out that the payment of compensation of EUR 298 million based on the conclusion of the Government of Serbia had a significant effect on the overall results of EPS, and it is about covering losses due to the implementation of measures to limit the sale price of electricity. That inflow from the state was recorded in other business income.
“The previous year was quite challenging for EPS, primarily due to the bad hydrological situation and significantly less production in hydroelectric plants, which was compensated by higher production in thermal plants and import of electricity. In addition, due to problems in coal production in mines, costs and purchases of coal were increased, which in the situation of a large increase in energy prices on the global market influenced the realization of large losses during the last year,” said Jelena Zindović.
The increase in profit was undoubtedly influenced by the increase in the price of electricity
Analysts state that in the latest report, EPS did not publish detailed data on realized production, cost structure and other data, as in the previous period, and that it is therefore not possible to quantify the effects of individual segments on revenue growth and profitability in more detail.
“However, based on the results in the previous period, it is clear that the big effect on EPS’s profit growth came through the increase in electricity prices compared to last year,” says the analytical team.
The price of electricity has risen three times this year. The first price increase was on the first of January by eight percent for households, the second in May also by eight percent for households and for the economy then the price of electricity rose from EUR 95 to EUR 110.81 per megawatt-hour. The third price increase of eight percent for households followed on November 1st.
Given that analysts have analyzed the financial report of EPS for the first three quarters, and the last increase in electricity prices occurred in November, it is expected that the increase in prices in the last quarter will increase the profit of EPS even more significantly.
