Romanian Hidroelectrica sees 3.5% lower revenues this year

The state-controlled hydropower group Hidroelectrica estimates its revenues will decrease by 3.5% y/y to RON3.2bn (EUR683m) this year, according to a company report quoted by the local media. Still, the country’s biggest hydropower generator plans to invest more than EUR105m in 2018. Hidroelectrica aims to make RON937.2m gross profit, which is almost twice lower on the year. The main factor behind the profit drop is a notable 32.0% y/y increase of expenses, up to RON2.3bn, triggered by some more significant provisioning expenses after the company gave up a few old investment projects and over higher wage expenses. In addition, Hidroelectrica plans to increase staff by 6.5% to about 3,600 employees this year. Total electricity generation estimated for this year exceed 16.6 TWh, more than around 16.0 TWh in 2017.

Hidroelectrica is Romania’s biggest electricity producer with 6,444 MW installed capacity. The state is the company’s majority shareholder and has agreed on its privatization with the IFIs. The initial plan was to sell 15% of the company’s shares on the Bucharest Stock Exchange and issue GDRs on a foreign market. The energy ministry announced last year the change of the privatization strategy and said it would initiate a 10% IPO, followed by another 5% sale later. Yet, the new energy minister considers that HIdroelectrica is still not ready to go public and recently announced that the company needs further consolidation.

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