Greece’s biggest electricity producer PPC posted a 63 percent drop in first-half profit on Tuesday, hurt by higher generation costs and tough competition.
Net profit fell to 128.8 million euros ($186.7 million), slightly below an average forecast of 133.8 million euros produced in a Reuters poll of analysts.
Sales declined 6.1 percent to 2.719 billion euros as businesses continued to curb electricity use or turned to cheaper rivals to save money in the recession.
Power consumption among small and medium-sized firms, the company’s most lucrative category, fell 16 percent.
But the state-controlled company said the situation was improving and would continue to do so next year, with favourable changes in the way electricity prices are regulated in Greece.
“In the second quarter, the rate of group revenue decline has slowed down, due to a more favorable sales mix, while there are signs of market share loss stabilisation in the high-margin customers segment,» CEO Arthouros Zervos said in a statement.
A labour strike in June also hurt PPC’s results because it forced the company to buy more electricity from rival producers to serve customers.
Operating profit dropped at a slower-than-expected pace of 27 percent to 603.8 million euros, exceeding analysts’ 588.5 million euro forecast. EBITDA was helped by labour cost cuts, following austerity measures and wage reductions in Greece’s wider public sector.
The Greek government, which owns 51 percent of PPC, plans to sell a 17 percent stake in the company, which has a total market value of 1.58 billion euros. It also mulls selling individual coal-fired plants to rivals, to comply with EU free market rules.