PPC profits rise after DEPA accord

Public Power Corporation SA, Greece’s biggest electricity supplier, posted a 30 percent nine-month profit increase, as settlement of a financial dispute with Public Gas Corporation (DEPA) and lower staff costs helped to offset higher fuel expenses.

Net income rose to 118.1 million euros from 90.8 million euros in the year-earlier period, the company, known as PPC, said in an Athens-bourse filing on Tuesday.

The cost of liquid fuel, natural gas and energy purchases rose to 2.45 billion euros, or 54.4 percent of total revenue, from 1.7 billion a year earlier.

Sales increased 8.7 percent to 4.56 billion euros.

The results “were positively impacted by 191.7 million euros from the resolution of financial issues with DEPA that have been outstanding for more than four years,” Chief Executive Officer Arthouros Zervos said in the statement.

Paris Mantzavras, an analyst at Athens-based Pantelakis Securities, said in a note on Tuesday that, excluding the “much higher than forecast one-off gains from the DEPA settlement, third-quarter results came in worse than our estimates, with the miss mostly attributed to higher costs for energy purchases.”

PPC’s total payroll costs fell by 155.2 million euros, or 16.3 percent, as the number of permanent employees fell to 20,367 from 21,075.

As a percentage of revenue, payroll expenses declined to 15.5 percent from 19.9 percent.

Zervos said the company forecast is that 2012 earnings before interest, tax, depreciation and amortization will be 17.5 percent to 18 percent of revenue, based on sales of 6 billion euros and taking into account the effects of the prolonged recession and lack of cash.

Provisions for unpaid bills in the nine months rose by 134 million euros to 229.5 million, including 57.4 million for high voltage customer Larco SA, Europe’s biggest ferronickel producer.

PPC’s net debt was 4.7 billion euros, unchanged from the end of 2011.


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