ZG Holding’s Revenues Decline, but Profit Surges by 23 Percent

Despite the reduction in total revenues, Zagrebački holding achieved a net profit growth of nearly a quarter last year, according to the consolidated financial report for 2025 published on the Zagreb Stock Exchange. The report states that the Zagrebački holding Group achieved a profit of 21.73 million euros in 2025, which is 23 percent higher.

Additionally, an operating profit (EBIT) of 41.88 million euros and a positive EBITDA of 104.98 million euros were achieved. EBIT decreased by 16 percent compared to the previous year, while EBITDA decreased by one percent. A loss of 22.24 million euros was recorded from financial activities.

Impact of Lower Subsidies

Last year, ZG Holding achieved total revenues of 779.62 million euros, representing a decrease of 78 million euros or nine percent compared to the previous year. The most significant factor contributing to the revenue decline was the item ‘other operating income’ amounting to 91.79 million euros, or 36 percent less. The decrease in this item primarily relates to lower revenues from state subsidies for compensating the difference in gas prices and lower revenues from unrealized gains from changes in the fair value of real estate investments.

Sales revenues amounted to 607.87 million euros, an increase of three percent compared to the previous year. The most significant increase in sales revenue was recorded in the water supply and drainage segments, amounting to 14.96 million euros due to higher revenues from wastewater treatment following the takeover of CUPOVZ on August 4, 2024, increased volumes of delivered water and drainage, and the construction of a larger number of new connections.

Furthermore, the maintenance of green areas generated revenues of 9.6 million euros through the introduction of new services and an increase in revenues from landscaping, as well as aligning service prices with variable input costs through the public procurement process. The maintenance of cleanliness and waste collection resulted in revenues of nine million euros due to a higher volume of work on maintaining public traffic areas as a result of the procurement of street cleaners and tankers, as well as the hiring of operational workers at the end of 2024.

Additionally, higher revenues from business customers in the sale of medicines were achieved, amounting to 9.1 million euros due to increased demand for prescription drugs, over-the-counter medications, and other galenic products. Parking revenues amounted to 3.65 million euros due to higher revenues from the sale of parking tickets, alongside a decrease in the sale of privileged tickets.

The maintenance and management of public roads recorded revenues of three million euros due to higher revenues from the City Budget following more executed works on regular maintenance of roads and the maintenance of public traffic areas in city districts, as well as aligning prices with input parameters through the public procurement process.

The sales revenue decline was recorded in the gas sales and distribution segment, amounting to 39.6 million euros due to lower volumes of distributed gas following the change of gas supplier in the public service obligation from October 1, 2024.

Surge in Personnel Costs

Expenses of 729.27 million euros were reduced last year by 68.2 million euros, or nine percent compared to the previous year. In the structure of operating expenses, the most significant increase was recorded in personnel costs, amounting to 33.8 million euros. This was influenced by an increase in the base for salary calculation and material rights from collective agreements of ZGH and its subsidiaries, as well as a five percent increase in the average number of employees due to the hiring of a larger number of operational workers in the Čistoća subsidiary, VIO company, and the transfer of employees from merged companies (Vode Jastrebarsko d.o.o., Vodovod Klinča Sela d.o.o, Odvodnja Samobor d.o.o. and Vode Žumberak d.o.o.) to VIO company.

– Within the operations of VIO company during 2025, more pronounced cost pressures were recorded, primarily due to increased costs of raw materials and materials due to higher volumes of extracted water, rising costs of constructing water supply and sewage connections, cooperative services, and ongoing maintenance services, as well as additional costs related to wastewater treatment activities, which had an unfavorable impact on the company’s financial result, in circumstances where there were no changes in the structure of water service prices during 2025 – the report states.

The most significant decrease in the structure of operating expenses was recorded in material costs and services, amounting to 113.83 million euros, primarily due to a decrease in the cost of goods sold as a result of lower volumes of gas delivered.

At the end of last year, the total net assets of ZG Holding amounted to 721.75 million euros, an increase of 28.88 million euros. Net debt as of December 31, 2025, amounts to 423.76 million euros, which is 51.62 million euros lower than the previous year due to regular repayment of principal on loans and an increase in cash balances.

Other long-term and short-term liabilities increased by 57.42 million euros due to deferred revenue recognition related to assets acquired by VIO during the reporting period through the merger with Odvodnja Samobor d.o.o.