Investor Relations Information - 23.11.2005

Press Release for Financial Results 9M/Q3 2005

RESS RELEASE

PPC's 9M 2005 financial results

 

ATHENS, November 23, 2005       

 

  • The sustained rise of oil and natural gas prices, during the 3rd quarter of 2005, combined with the further increase of expenditure related to CO2 emission rights, led to a reduction of operating profit for the 9M 2005 period, to € 327,4 m, compared to € 513,5 m in the corresponding period of 2004 (-36,2%), despite a revenue increase of 5,2%.
  • Net income decreased to €155,1m, a reduction of 39,5%, from € 256,3m in 9M 2004.
  • Capital expenditure amounted to € 534,4 m compared to € 537,1 m in 9M 2004.

More specifically,

  • Total revenues, which amounted to € 3.239,4 m, grew by 5,2% as a result mainly of the modest increase in sales, combined to  the increase of tariffs by 2,5% in November 2004. The weighted average tariff increase by 3,19%, effective 1.9.2005, does not  impact substantially on revenues for 9M 2005.
  • Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) decreased to  € 719,1 m, a reduction of 22,6% compared to 9M 2004. This reduction is mainly due to:

    a) Increased expenditure  for oil and natural gas (+29,9%) by € 163,8 m, of which   € 136,9 m reflect the impact of the increase in  
    b) An amount of € 69 m representing the expenditure for CO2emission rights.

This first time, in 2005, expense, represents a significant cost factor reflecting PPC’s contribution to the implementation of the Kyoto Protocol, in respect of a safer environment.

This expenditure was calculated on the basis of estimates concerning the volume of emissions and their price at September 30, 2005, together with the expenditure for realised purchases during the 9M 2005 period.

c)Increased cost of lignite consumed (payroll and depreciation excluded) by € 55,6 m.

 

  • EBITDA margin reached 22,2%, compared to 30,2% in 9M 2004.

  • Non-operating expenses decreased to € 95,0 m  compared  to € 105,5 m in 9M 2004.  
  • The share of loss in associated companies decreased to € 8,3 m from € 9,9 m in 9M 2004 and corresponds to PPC's investment in Tellas S.A., the telecommunications company.
  • Despite the adverse development in oil and natural gas prices and the first time, in 2005,expense, for the required CO2 emission rights, impacting negatively on  financial  results, the Company achieved a reduction of 1% in net debt  from  € 3.798, 4 at 30.9.2004 to € 3.762,1 at 30.9.2005.
  • After the revaluation of fixed assets, equity on 30.9.2005  increased to € 5.168,3 m compared to € 3.581,1 m on September 30,2004. This figure may be modified after the completion of the procedure of registering, accounting settlement and physical/accounting correlation of its revalued assets with the fixed assets register.
  • Current headcount, excluding personnel assigned to HTSO, decreased, as a result of natural attrition and constrained hiring, to 27.503 as compared to 27.794 employees, at the end of  9M 2004.

   

 The financial information contained in this statement has been prepared according to International Financial Reporting Standards, formerly International Accounting Standards

              Summary Financials (Euro m) 

 

9M 2005 Unaudited

9M 2004 Unaudited

Δ (%)

Total Revenues

3.239,4

3.078,4

5,2%

EBITDA

719,1

929,5

-22,6%

EBITDA Margin

22,2%

30,2%

 

Profit from Operations (EBIT)

327,4

513,5

-36,2%

EBIT Margin

10,1%

16,7%

 

Net Income

155,1

256,3

-39,5%

EPS (in Euro)

0,67

1,10

-39,1%

No. of Shares (m)

232

232

-

Net Debt

3.762,1

3.798,4

-1,0%

    

Summary Profit & Loss (Euro m)

 

9M 2005 Unaudited

9M 2004 Unaudited

Δ (%)

Total Revenues

3.239,4

3.078,4

5,2%

        -Revenue from energy sales

3.004,6

2.852,3

5,3%

        -Other

234,8

226,1

3,8%

Total Operating Expenses (excl. depreciation)

2.520,3

2.148,9

17,3%

Total Payroll Expenses

916,0

853,1

7,4%

Total Fuel Expenses

710,9

547,1

29,9%

Energy Purchases

155,1

146,3

6,0%

Transmission System Usage

214,5

192,0

11,7%

CO2 Emissions’ allowance

69,0

-

 

Other Operating Expenses

454,8

410,4

10,8%

(EBITDA)

719,1

929,5

-22,6%

EBITDA Margin (%)

22,2%

30,2%

 

Depreciation & Amortization

391,7

416,0

-5,8%

Profit from Operations (EBIT)

327,4

513,5

-36,2%

EBIT margin (%)

10,1%

16,7%

 

Non-Operating Expenses

95,0

105,5

-10,0%

- Net Financial Expenses

93,3

93,8

-0,5%

- Foreign Currency Gains/(Losses)

(5,2)

(13,5)

-61,5%

- Other Income

11,8

11,7

0,9%

- Share of loss in associated companies

8,3

9,9

-16,2%

Pre-tax Profits

232,4

408,0

-43,0%

Net Income

155,1

256,3

-39,5%

EPS (in Euro)

0,67

1,10

-39,1%

          

          Summary Balance Sheet & Capex (Euro m)

 

30/09/2005 Unaudited

30/09/2004 Unaudited

Δ (%)

Net Debt

3.762,1

3.798,4

-1,0%

Total Equity

5.168,3

3.581,1

44,3%

Capital Expenditure

534,4

537,1

-0,5%

 Public Power Corporation’s Chief Executive, Dimitris Maniatakis said:

“The profitability of the Company for the first 9 months of 2005 was reduced, mainly due to external factors. The sales increase as well as the small adjustment of tariffs (started 1st September 2005), was not enough to counterbalance the negative consequences of the crude oil and natural gas price increases as well as the environmental costs that was imposed to the Company for purchasing CO2 emissions rights.

It is common practice that the fuel as well as the emissions costs, are reflected in the tariffs mechanism, which is not applied in the current Greek tariff policy. Please note that we have the lowest tariffs for households in Europe (specifically, they are 50% lower than the European average). Therefore, PPC is losing a substantial part of its profits.

The management is taking the necessary initiatives to achieve cost reduction and productivity enhancement.

The new business plan aims to improve the position of PPC and ensure further growth of the Company. Our top priority is to restructure the corporation via an upgrade program and prepare PPC for the new competitive environment”. 

For further information, please contact:

Gregoris Anastasiadis Chief Financial Officer Tel.: +30 210 5225346.

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