In the first six months of 2024, Elektroprivreda Crne Gore (EPCG) reported a loss of €3.43 million after taxation. This represents a decline of 103% or €104.96 million compared to the same period last year, when the company achieved a net profit of €101.53 million. The financial report highlights a significant drop in performance compared to the previous year.
For the first half of the year, EPCG’s revenue from sales amounted to €196 million, with additional operational income of €557,616. This reflects a decrease of 34.92% or €105.47 million compared to the same period in the previous year. Total operating costs, including wages, salaries, and other personal expenses, reached €201.57 million, representing an increase of 1.12% or €2.23 million year-over-year.
Causes of poor performance
The report indicates that a decrease in spot market prices contributed to the poor performance. Prices fell from €100.75 per MWh in January to €63.19 per MWh in May. The average achieved price for the six-month period was €81.71 per MWh, compared to €130.37 per MWh during the same period last year. The reduced prices significantly impacted the company’s revenue.
Additionally, production levels were 15% below planned figures, with particularly low production from hydro sources, which was 63% below plan. The revenue from exporting electricity amounted to €48.97 million, while import expenses were €26.59 million. Compared to the previous year, export revenue decreased by €93.4 million, and import costs were reduced by €15.9 million, resulting in a financial balance that was €77.6 million worse than the previous year.
Costs and revenue
Revenue from selling electricity to domestic dependent entities totaled €13.84 million, a decrease of €6.96 million compared to €20.8 million in the same period last year. The cost of electricity from renewable sources was €21.78 million, down €14.07 million from €35.85 million in the previous year. Coal costs amounted to €20.55 million, a decrease of €4.37 million from €24.93 million last year.
Liquidity
The report states that the company’s liquidity is not at risk. In fact, EPCG is described as highly liquid. The current liquidity ratio (the ratio of cash and cash equivalents to short-term liabilities) was 0.42 as of June 30, down from 0.44 at the end of last year. Conversely, the working capital ratio (the ratio of current assets to short-term liabilities) improved to 2.02 from 1.75 at the end of the previous year. The debt ratio (the ratio of total liabilities to total assets) was 0.15, indicating a low level of debt and the company’s ability to cover all obligations to creditors and investors.
Production
Hydro Power Plant (HPP) Perućica produced 462,898 MWh in the first six months of 2024, which is 18.07% less than planned and 69.16% less compared to the same period in 2023. HPP Piva produced 383,062 MWh, which is 0.76% below the planned production and 69% less than the previous year. Thermal Power Plant (TPP) Pljevlja produced 487,336 MWh, falling short of the planned production by 7.7% and 76.42% less compared to the previous year. The coal consumption for this period was 494,232.6 tons.
Conclusion
EPCG is facing significant challenges due to falling energy prices, reduced production, and decreased export revenue. Despite maintaining liquidity, these issues require careful analysis and strategic adjustments to improve performance in the remainder of the year.
