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HEP Finally Published Consolidated Business Results and Reported Record Loss

HEP has finally published the business results of the parent company for the year 2022. Prior to this, we published unofficial results in the publication ‘1000 Largest’, based on the annual financial report, which was initially submitted to Fina before April 30, but was soon withdrawn.

According to the now published consolidated data, HEP ended last year with 2.47 billion in revenue, which is a slight correction from the initially reported 2.52 billion. This represents a 79.6 percent increase in revenue compared to 2021. However, a loss (before tax) of 779 million euros was reported. The last time HEP ended in the red was back in 2007, when it recorded just over one million kuna in net loss (around 140 thousand euros). This time, however, the loss is significantly larger, making HEP last year the unequivocal largest loser, with a loss 4.2 times greater than Brodosplit and 5.2 times greater than the parent company Fortenova.

In this category, there is the largest change compared to the first report, according to which HEP was in the black by 147 million euros. The difference of about 926 million euros is clearly a loss incurred due to the capping of electricity prices. The dramatic nature of last year’s operations is also revealed in HEP’s balance sheet. The item of liabilities to banks increased a staggering 14 times – from 103 million euros to 1.48 billion euros.

As a result, the Government intervened even before the publication of HEP’s financial report, on March 30, with a decision on recapitalization amounting to 900 million euros, which, according to HEP’s analysis at the time, represented the losses due to the Government’s energy measures. Of that, 400 million euros was directed through a shareholder loan, and the Ministry of Economy was tasked ‘to take all necessary actions with the intention of increasing the share capital of HEP d.d. to a total value of up to 900 million euros’, which includes the approved 400 million euros loan.

Recently, a new story has emerged related to HEP and the Ministry of Economy. According to the words of parliamentary representative of Most, Zvonimir Troskot, HEP procures gas at a price of 47.6 euros/MWh, and then sells it through HROTE for 1 cent/MWh to suppliers. Troskot estimates that the damage is about half a million euros daily. This would amount to about 50 million euros from the end of March – when the Government adopted such a regulation – to today.

  • HEP has been among the largest exporters and importers in recent years. In 2021, with 162 million euros, it was the eighth largest exporter in Croatia, but with 745 million euros in imports, it was the third largest importer. Last year, there are no export and import items.
  • In HEP, at the beginning of the year, based on reported working hours, there were 482 employees (four more than in 2021), and the average salary was 1579 euros (a slight increase of 0.62 percent).

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