HEP’s Profit Reached 1.35 Billion Kuna

The business revenues of the HEP Group amounted to 7.8 billion kuna in the first half of the year, 9.4 percent higher than in the same period last year, while net profit reached 1.35 billion kuna, which is about 10 million more.

This is shown in the business report of the HEP Group, published on Thursday, which also states that revenues from electricity sales in the first half of the year increased by 224.2 million kuna.

This growth is a result of higher sales by HEP’s producers in the incentive system for renewable energy production, higher selling prices of electricity sold on the wholesale market, and increased supply to customers in the region, the report states.

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It is also added that revenues from gas sales decreased by a total of 81.5 million kuna, although gas sales increased both on the wholesale market and for the supply of end customers.

Revenues from the sale of thermal energy, on the other hand, decreased by 1.6 million kuna.

The business expenses of the HEP Group amounted to 5.9 billion kuna in the first half of the year, which is 10.6 percent higher compared to the same period last year.

“Due to increased production of electricity and thermal energy in thermal power plants and significantly higher coal prices, energy fuel costs increased by 244 million kuna,” the report states.

Electricity procurement costs increased by 249.8 million kuna due to higher procurement and higher prices of imported electricity. Gas procurement costs for wholesale, meanwhile, decreased due to lower procurement prices.

Economic Growth and Colder Winter Stimulated Consumption

The report highlights that the growth of economic activities, a colder winter, and high temperatures at the beginning of summer influenced the increase in electricity consumption in Croatia.

The increase in gas sales was also influenced by the expansion of gas supply through the acquisition of customers outside the area covered by the HEP Group’s distribution network in Eastern Slavonia.

“In addition, the HEP Group increased the number of customers and electricity sales in Slovenia,” the report states.

It is emphasized that the first half of the year was marked by unfavorable hydrological conditions, resulting in the production of 2.4 TWh of electricity in hydropower plants, which is 32 percent less compared to the first half of 2016.

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“Due to unfavorable hydrology and increased electricity supply in the domestic and foreign markets, electricity procurement on the market increased by 590 GWh, or 20 percent, and production in thermal power plants increased by 387 GWh, 24 percent, which affected the increase in operating costs,” the HEP Group report states.

A total of 3,567 GWh was procured outside the system, of which 929 GWh relates to the purchase of electricity from renewable sources and cogeneration in the incentive system, and 2,638 GWh to imports and procurement from traders and producers in Croatia.

Investments of 833 Million Kuna

The report also states that investments in the first half of the year amounted to 833 million kuna, which includes replacements, reconstructions, revitalizations of existing energy facilities, construction and preparation for the construction of new energy facilities, and consumer connections.

Receivables from customers amount to 1.68 billion kuna and are lower by 271 million compared to the beginning of the year, or 13.9 percent.

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The Group’s liquidity was satisfactory, and obligations to suppliers were settled on time and exclusively from regular cash inflows from operations.

The report also states that the General Assembly of Hrvatska elektroprivreda decided at the beginning of June to pay 794.3 million kuna from the profit for 2016 to the state budget.

At the beginning of July, 600 million kuna was paid, while the remaining 194.3 million should be paid by the end of the year, taking into account the preservation of adequate liquidity of HEP, the business report concludes.