EPHZHB’s net profit for 2019 lands nearly seven times lower year over year

Net profit of public power utility Elektroprivreda Hrvatske Zajednice Herceg Bosne (EPHZHB) dropped 85.1% last year against 2018, to BAM 2.47 million (EUR 1.26 million), according to the official results.

The company’s net profit in 2018 was BAM 16.6 million (EUR 8.49 million) or almost seven times higher.

Even though revenues strengthened and costs fell fall, earnings have plunged

EPHZHB’s operating revenues in 2019 jumped to about BAM 465 million (EUR 237.7 million), from some BAM 442 million (EUR 226 million) in 2018, while operating expenses fell from BAM 416 million (EUR 212.7 million) to BAM 412 million (EUR 210.6 million).

The annual report for 2019, posted on the company’s website, doesn’t include an explanation for the last year’s profit drop.

At the beginning of October, EPHZHB revised its annual business plan, and one of the main reasons it cited at the time was the termination of electricity supply to the Mostar-based aluminum producer Aluminij in mid-June.

The company stopped supplying power to Mostar-based aluminum producer Aluminij in mid-June

EPHZHB said at the time that the revision lowered expected operational revenues by 6.8%. The setback with regard to the aluminum producer also pushed the operational revenue outlook BAM 85 million (EUR 43.4 million) lower.

The event also impacted the expected operational expenses by 10.9% and the planned purchase of electricity by 32.6%.

In March last year, EPHZHB signed an agreement with power utility Elektroprivreda Republike Srpske (ERS) under which PHE Čapljina, which is operated by EPHZHB, should deliver half of its 2019 output to ERS. The two sides later agreed to continue the cooperation into 2020.