Greece’s dominant power utility PPC reported a bigger-than-expected drop in first-half net profit, weighed down by increased provisions for overdue bills and tariff cuts.
Net profit dropped 24 percent to 96.3 million euros ($127 million), down from 127.1 million euros in the same period last year, the company said on Thursday. Analysts in a Reuters poll had forecast on average a net profit of 105.9 million euros.
The company said bad debt provisions rose 32 percent year-on-year to 249 million euros. The results were also hurt by tariff cuts for industries and businesses.
PPC is paying the price for having become the tax collection vehicle of the cash-strapped government during a deep recession.
In 2012, Athens imposed a property tax through electricity bills as part of austerity measures agreed with its foreign lenders in exchange for a 240 billion euro bailout.
But many squeezed households delay payments, or refuse to pay electricity bills, hurting the utility’s bottom line.
Sales to austerity-hit households and businesses dropped 4 percent at 2.8 billion euros. The reading was broadly in line with analysts’ average estimate.
PPC, 51 percent state-owned, controls almost all of Greece’s retail electricity market and its output accounts for about two thirds of the nation’s power output. The government wants to sell 30 percent of the firm in 2015 and then divest another 17 percent to liberalize the market.
Athens’ plans also include the privatization of power grid operator ADMIE, a 66 percent stake of which PPC will sell to strategic investor later this year.
Belgian power grid operator Elia, State Grid Corporation of China (SGCC), Italian grid operator Terna and Canadian pension fund PSP Investments have been shortlisted to bid for ADMIE.