Press Release - 29.08.2006

PPC's consolidated 1H 2006 financial results

PRESS  RELEASE

 

                PPC’s CONSOLIDATED 1H 2006 FINANCIAL RESULTS

 

 

ATHENS AUGUST 29,2006

 

 

·                Total Revenues increased by  10% and amounted to € 2,33 bil versus € 2,12 bil in 1H 2005.

 

·               Financial expenses decreased by 26,3% and amounted to € 52,6m,compared to  € 71,4m in 1H 2005.

 

 

·                Net income for 1H 2006 amounted to € 96,2m, a decrease of 34,7% compared   to € 147,4m in 1H 2005, a reduction mainly attributed to exogenous factors.

              

 

·                Total equity increased by 7,5%  and  amounted to € 5.186,5m versus € 4.822,5m in 1H 2005.

 

·                Capital expenditure amounted to € 326m, versus € 363m  in 1H 2005.

 

 

 

More specifically,

REVENUES

Revenues from energy sales, increased by 9,9%, from € 1.966,4m to € 2.160,1m, as a result of an increase in sales  by approximately 5%, of an average electricity tariff adjustment of 3,2% in September 2005 and of a change in the sales mix.

OPERATIONAL EXPENSES

Operational expenses (excluding depreciation) increased by 18,7%, from € 1.561,8m in 1H 2005, to € 1.854,5m in 1H 2006, an increase mainly attributed to the increase  in expenditure  for  liquid fuel, natural gas and energy purchases. More specifically,   the rise in liquid fuel and natural gas prices, compared to 1H 2005, resulted in an increase of the corresponding expenditure by € 131,9m. In addition, expenditure for energy purchases marked a significant increase, from € 83,5m in 1H 2005 to € 193,1m in 1H 2006, an increase of 131,3%, due to the sale of larger quantities of electric energy from third parties to the Pool. Thus, increased expenditure for liquid fuel, natural gas and energy purchases, were the main reasons that led to a reduction of Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) by 14,4% with respect  to 1Η 2005,to  € 476,8m,given that the   electricity tariff adjustment  of 3,2% in September 2005, did not cover the negative impact from the sharp rise in fuel prices and in the expenditure for energy purchases.

Payroll expenses increased by 7,9% from € 620m in 1H 2005, to € 668,7m in 1H 2006. This increase, is attributed to the impact of the new collective agreement retroactive to February 2006, to seniority salary adjustments and to the decrease of payroll capitalized. Total payroll expenses in 1H 2006, amounting to € 671,4m, include an amount of the  order of € 2,7m, related  to an once off expense ,to date, for a limited voluntary retirement scheme for PPC’s cadres.  

Based on the actual CO2 emissions during 1H 2006, as well as on the projected generation  for the July-December 2006 period, it is estimated that the Company will not incur, during 2006, a deficit of CO2 emission rights. Consequently, 1H 2006 results have not been affected by a relevant expenditure, while the respective expenditure in 1H 2005 amounted to €45m.

EBITDA margin reached  20,5%, compared to 26,3% in  1H 2005.

FINANCIAL EXPENSES

Financial expenses decreased to € 52,6m, versus € 71,4m in 1H 2005 (- 26,3%).

Despite the increase in debt to € 3.789m from € 3.639m at the end of 1H 2005 and the significant increase of lending rates in the european capital markets between 1H 2006 and the corresponding period in 2005, PPC achieved a reduction in net financial expenses of 10,4%, from € 64,6m to € 57,9m.

PARTICIPATION IN ASSOCIATED COMPANIES.

The share of loss in associated companies decreased to € 2,5m from € 5,9m in 1H 2005 and corresponds to PPC΄s investment in Tellas S.A, the telecommunications company.

The share of profit in associated companies amounting to € 11,2m-while the corresponding magnitude in 1H 2005 was equal to zero- reflects the fact that LARCO, a nickel producing  company, in which PPC holds a 28,6% stake, is achieving an improvement of its equity, due, mainly, to the significant rise in nickel prices.           

Headcount, excluding personnel assigned to HTSO, was reduced to 26.649 employees as compared to 27.546 at the end of 1H 2005.

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

 

Summary Financials (€ mil )

 

 

1H 2006

Audited

 

1H 2005

 Audited

 

Δ%

 

Total Revenues

2.331,3

2.119,0

10,0%

EBITDA

476,8

557,2 (2)

-14,4%

EBITDA Margin  

20,5%

26,3%

 

Profit before Taxes & Fin. Expenses

185,3

300,2 (2)

-38,3%

Margin

7,9%

14,2%

 

Net Income

96,2

147,4 (2)

-34,7%

EPS (In euro)

0,41

0,64

-35,9%

No of Shares (m.)

232

232

-

Net Debt

3.713,9

3.562,1

4,3%

 

Summary Profit & Loss (€ mil)

 

 

1H 2006

 Audited

 

1H 2005

Audited

 

Δ%

 

Total Revenues

2.331,3

2.119,0

10,0%

 - Revenues from energy sales

  2.160,1

1.966,4

   9,9%

 - Other revenues

  171,2

      152,6

12,2%

Total  Operating Expenses (excl. depreciation)

1.854,5

1.561,8 (2)


18,7
%

- Total Payroll Expenses

671,4

620,0 (1)

8,3%

-  Total Fuel Expenses

530,5

398,6

33,1%

-  Energy Purchases

193,1

83,5

131,3%

-  Transmission System Usage

141,7

137,4

3,1%

-   Other operating expenses  

317,8

322,3 (1),(2)

-1,4%

 EBITDA

476,8

557,2(2)

-14,4%

EBITDA Margin

20,5%

26,3%

 

Depreciation and amortization

291,5

257,0

13,4%

Profit before Taxes & Fin. Expenses

185,3

300,2(2)

-38,3%

Margin

7,9%

14,2%

 

Financial Expenses  

52,6

71,4 (2)

- 26,3%

-  Net Financial Expenses

57,9

64,6 (2)

-10,4%

-  Foreign Currency Gains / (Losses)

5,3

(6,8)

 

Share of loss in associated companies

2,5

5,9

-57,6%

Share of profit in associated companies

11,2

-

 

Pre-tax profits

141,4

222,9(2)

-36,6%

Net Income

96,2

147,4(2)

-34,7%

EPS (in Euro)

0,41

0,64

-35,9%

 

Summary Balance Sheet & Capex (Euro m)

 

 

1H 2006

Audited

 

1H 2005

Audited

 

Δ%

 

Total Assets

12.733,0

12.140,6

4,9%

Net Debt

3.713,9

3.562,1

4,3%

Total Equity

5.186,5

4.822,5 (2)

7,5%

Capital expenditure

325,9

362,7

-10,1%

 

 

     (1) Adjusted for comparison purposes.

     (2) Adjusted according to the provisions of  IFRIC 1.

 

 

Μr. Maniatakis Public Power Corporation’s Chief Executive Officer, said:  

A considerable effort is being carried out today in the Company, aiming at the improvement of the reliability of the electric energy system and of the quality of services provided to its customers. This goal shall be achieved through a new organization, new state of the art services and customer management systems, in order for PPC to develop a new customer oriented culture and relationship .

With respect to the Company’s financials, it is noted that in 1H 2006 net income was negatively impacted by the rise in fuel prices which burdened the Company with, approximately, an exta €130 mil. The implementation of PPC’s  new Business Plan is being carried out in all business units and, as already mentioned, first results are expected in 4Q 2006.

For further information, please contact:

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

The financial data and relevant information on the Interim Financial Statements for 1H 2006 shall be published in the Press on August 31, 2006.

 

The financial data and relevant information on the Interim Financial Statements for 1H 2006 as well as the Interim Financial Statements for 1H 2006 on a stand alone and on a consolidated basis shall be published in the Company’s web site (www.dei.gr) on August 30, 2006 after the closing of the Athens Stock Exchange session.

 

 

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