Cold weather helps boost PPC’s profits

The Public Power Corporation (PPC) yesterday reported a significant increase in profits during the first quarter of 2002. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 35.3 percent year-on-year in the first quarter to 276 million euros, while net profits rose 106.6 percent, to 111 million euros. EBITDA margin stood at 33 percent versus 28 percent in the first quarter last year. Revenues grew 12.6 percent year-on-year to 829 million euros, from 736 million euros a year earlier, helped by an 8.2-percent jump in consumption growth. The company attributed the steep profit growth to improvements in its operations. «We exceeded the targets of our business plan by improving our operational efficiency, while we also benefitted from higher consumption levels,» Managing Director Stergios Nezis said. The harsh winter, the coldest in 40 years, helped consumption. In some cases factories were forced to close in extreme cold and blizzard conditions, but household consumption more than made up for the losses. Operational costs rose 3.7 percent, chiefly because spending on wages rose 4.7 percent, despite the fact that the company employes 930 fewer people than it did last year. PPC currently employs 29,400 and plans to cut its workforce to 25,000 by 2005. Thanks to lower fuel prices, fuel costs decreased 8.3 percent. PPC also managed to decrease its net debt by 8.7 percent, to 4.681 billion euros. «These are very encouraging results although there are seasonal factors involved in the first quarter. That jump in consumption growth seems directly related to the bad weather we had,» said one Athens-based analyst. «Nevertheless, they do show the restructuring push is working,» she added. PPC has undergone considerable restructuring over the past couple of years, ahead of last year’s stock market listing and the deregulation of the electricity market. PPC retains the monopoly of electricity distribution, but has lost the monopoly of production. Despite several licenses for electricity production, it will be some time before these new ventures become operational. PPC is also turning its sights abroad, seeking to enter the cross-border electricity trade market and to form alliances with bigger European companies. Diversification, including a foray into telecommunications, is also in the cards. (Combined reports)