ECONOMY

Greek utility PPC’s Q1 profit up on cut in Gazprom prices

Greece’s dominant electricity producer PPC reported on Thursday a higher-than-expected 65 percent profit rise for the first quarter, helped by lower prices for natural gas supplied by Russia’s Gazprom.

Net profit stood at 81.3 million euros ($111 million), compared with a profit of 49.4 million euros in the same period last year. Analysts in a Reuters poll had forecast on average a net profit of 66.6 million euros.

PPC booked a 23.2 million euro gain after Russia’s Gazprom retroactively reduced from July 1 the price of natural gas it supplies Greece by 15 percent. PPC burns natural gas to produce about a tenth of its electricity output.

Profit also includes another one-off gain of 21.3 million in recovered state aid in relation with a client dispute, PPC said. PPC shares were flat Thursday morning in Athens, making the firm Greece’s seventh-biggest company in terms of market value at 2.63 billion euros.

But recession continued to weigh on the company, which controls almost all of the retail market for electricity and accounts for about two thirds of Greece’s power output.

Sales to austerity-hit households and businesses were flat at 1.489 billion euros. The sales reading, however, was above analysts’ average 1.447 billion euro estimate.

The government, which owns 51 percent of PPC, plans to spin off part of the company’s production base to private investors next year under the terms of its international EU/IMF bailout.

Athens also plans to sell to investors a further 17 percent stake in the rump PPC that will remain after the spin-off.

Greece’s electricity liberalization plans also include the privatization of power grid operator ADMIE, a 66 percent stake of which PPC will sell to a strategic investor later this year.

Grid operators from China, Belgium and Italy are among companies interested in buying the stake. [Reuters]