Hydrology optimizes HEP’s liabilities in first half

In a statement to the Zagreb Stock Exchange, state-owned power utility HEP Group reported net gain of HRK 1.35 billion (EUR 178.5 million) for the first half of the year, 1.7% more than in the corresponding period of 2014. The company cited continued stagnation of economic activity and lower winter temperatures, where the latter caused an increase in energy consumption, in particular power, heat and gas.

Favourable hydrological situation that marked 2014 continued in the first six months of this year, enabling hydropower plants to generate 3.6 TWh or 0.6 TWh less than a year before, taking a share of 44.4%, while thermal power plants cut production by 0.2 TWh, which optimized total expenses. Power imports increased by 0.7 TWh.

Gross income soared by 10% to EUR 7.14 billion (EUR 950 million), and the rise was attributed mostly to wholesale of gas, after HEP entered the market a year before, according to the consolidated report. Proceeds from electrical energy were at the same level. Expenditures rose by 19.6% to EUR 746 million, again mostly because of costs of gas wholesale activity, while imports and incentives for energy from renewable sources and for cogeneration made electric power purchase costs jump 60.9% or EUR 38.85 million. Other expenses enlarged partly because of bigger costs for carbon dioxide emission units. The group’s investments were EUR 111.7 million.

In the unconsolidated results for parent company HEP d. d., net gain was reported to be EUR 124.74 million, down from EUR 180.2 million in the first semester of 2014, as income dropped more than expenses. Among other reasons, prices for commercial customers dropped in the conditions of stronger competition, and some clients switched to suppliers outside of HEP Group, the report said. Investment in preparations for future power plants, cogeneration facilities powered by forest biomass, and information and communications infrastructure was EUR 8.06 million. It was financed by own funds and a long-term loan.