Croatia’s state-owned energy company Hrvatska Elektroprivreda (HEP Group) reported a net profit of HRK 1.36 billion (around EUR 184 million) in 2018, an increase of 5% compared to 2017. The profit came from the group’s electricity business, with losses seem in other segments of operations, according to HEP Group’s annual report.
HEP Group posted an operating profit of HRK 1.66 billion (around EUR 224.5 million) in 2018, a decrease of 27.7% against 2018 due to a stronger increase in operating expenses than in operating revenues.
In 2018, the group had a financial profit of HRK 24.7 million (about EUR 3.34 million), after posting a financial loss of HRK 704.1 million (about EUR 95.2 million) in 2017. The change is reflected in the increased net profit for 2018, according to the annual report.
Favorable hydro conditions marked 2018
Operating revenues stood at HRK 15.2 billion (around EUR 2 billion), an increase of HRK 229 million (about EUR 31 million), compared to 2017, mainly due to sales revenues increasing by HRK 780.1 million (5.8%), or about EUR 105.5 million.
Operating expenses stood at HRK 13.5 billion (about EUR 1.83 billion), going up by HRK 865.4 million (EUR 117 million) compared to 2017.
The increase was due to the higher purchase cost of sold gas (by 61.4%), mostly due to gas supply to domestic customers, an operation that was not conducted in 2017, as well as a 119% surge in the cost of CO2 emissions compared to 2017 and a 1.6% rise in the purchase price of electricity, due to higher costs of offtake of power produced from renewable energy sources and at cogeneration plants.
HEP Group’s investments in 2018 were worth HRK 2.38 billion (around EUR 321.9 million). The investments were financed from the company’s own sources thanks to good liquidity.
At the end of 2018, HEP Group had 11,011 employees, 883 fewer than at the end of 2017, due to downsizing as part of the reorganization of distribution system operator (DSO) HEP ODS in November 2017.
Revenues from electricity sales up 1.4%
HEP Group reported HRK 11.7 billion (about EUR 1.58 billion) in revenues from electricity sales in 2018, which accounted for 77% of the company’s operating revenues last year. The 1.4% increase in revenues from electricity sales compared to 2017 was due to stronger electricity sales to buyers in Croatia and HEP’s wider share of sales to business customers, as well as a rise in the average selling price for business customers.
HEP sold 14.6 TWh of electricity to domestic buyers (881 GWh more than in 2017) and 2.9 TWh of electricity on neighboring markets (769 GWh less than in 2017).
The company’s market share in electricity supply to domestic customers grew to 89.1%, while entry into regional markets (Slovenia, Bosnia and Herzegovina, and Serbia) strengthened HEP Group’s position as the market leader in electricity supply, according to the annual report.
Favorable hydro conditions marked 2018, with hydropower plants (HPP) producing 6.9 TWh of electricity, which was by 1.9 TWh (38.7%) more than in 2017, with the thermal power plant output declining by 838 GWh (20.7%).