Press Release - 30.03.2010

Consolidated financial results 12M 2009

PUBLIC POWER CORPORATION S.A.
COMMUNICATIONS DEPARTMENT

PRESS RELEASE

  • EBT in 2009 amounted to € 993.1 m, compared to losses of €395.9 m in 2008, while net income amounted to € 693.3 m, versus losses of € 305.9 m in 2008.
  • Turnover reached € 6,030.4 m versus € 5,801.9 m in 2008, an increase of € 228.5 m (+3.9%). From the implementation of IFRIC 18, effective 1.1.2009, PPC recognized in the 2009 turnover, additional revenues of € 168.9 m representing 2009 customer contributions for connections to the network. With the exclusion of this amount, the increase in turnover is limited to € 59.6 m (+1.0 %), versus 2008.
  • In 2009, 28.2% of the Company's revenues were absorbed by expenses for oil, natural gas, energy purchases and CO2 emission rights, marking a sharp drop compared to the corresponding 2008 figure, which stood at 53.2%.

The main factors that led to this complete turnaround compared to 2008 related to:

  • The significant drop in international fuel prices, as well as in prices of energy purchased by PPC,
  • The increase by 8 percentage points, to 60.4% in 2009, of the contribution of domestic "fuels" (lignite, hydro, RES) in the energy mix, versus 52.2% in 2008, and, to a lesser extent to,
  • The reduction in demand especially in low tariff customer segments.

In absolute terms, the significant drop in fuel prices and lower electricity demand compared to 2008, resulted in a reduced expenditure for oil, natural gas and energy purchases by €1,351.6 m, a reduction of 46.2 %.

It is worthwhile noting that, hydro generation in 2009 increased by 2,052 GWH (+65.1%), compared to the corresponding level of 2008, a year of poor hydro conditions, while, electricity generation from lignite power stations increased by 672 GWH (+2.2%).

  • In 2009, the Group assigned an independent firm for the appraisal of its property, plant and equipment at December 31, 2009 fair values. The results of the appraisal have been recorded in the financial statements of December 31, 2009. Negative valuation that impacted 2009 financial results amounted to €138.7 m, while the depreciation of the new appraised values will commence from January 1, 2010.
  •  ΕΒΙΤDΑ amounted to € 1,677.5 m compared to € 343.6 m in 2008, an increase of € 1,333.9 m (+388.2%). ΕΒΙΤDΑ margin reached 27.8%, compared to 5.9% in 2008. Without the negative valuation impact resulting from the appraisal of the Group's property, plant and equipment, EBITDA and EBITDA margin would amount to € 1,816.2m and 30.1%, respectively.
  • Operational cash flow increased by € 1,531 m, compared to the corresponding figure in 2008.

Commenting on the financial results of the period, Arthouros Zervos, Public Power Corporation's Chairman and Chief Executive Officer, said:

"2009 was an excellent year with very strong profitability compared to previous years. This is mainly due to the increased participation of hydro and lignite generation in the energy mix and the sharp decline of fuel prices and energy prices relating to purchases from the pool and imports. Furthermore, there was a positive impact from the decrease in demand of low tariff customer segments.

2010 began with good prospects, as some of the parameters that had a positive impact on 2009 performance continue to have similar effect. However, these positive prospects may be affected by a number of factors that should be taken into consideration, including:

  • The impact of the current economic environment on our customers liquidity,
  • The entry of competitors in the retail supply market, which continues to operate under conditions of extensive tariff distortions, permitting newcomers to cherry pick customers, aiming at unwarranted short term profits. PPC has already submitted its proposals to the Greek Regulatory Authority of Energy (RAE) with regards to this critical matter.
  • Furthermore, PPC's 2010 financial results will be burdened by approximately €100 million, due to the abolishment of the special fuel tax exemption for the diesel consumed by PPC in power generation plants, mainly in the islands.
    All the above lead towards the intensification of our efforts for the improvement of our operational efficiency, especially as PPC has to operate in an increasingly competitive environment.
    PPC's long term planning is based amongst others, on the pillars of Sustainable Development, Protection of the Environment and Competitiveness, aiming at better utilization of domestic energy resources, with the parallel dynamic development of its renewables portfolio. At the same time, the Company is targeting an optimum risk management strategy to minimize its exposure, mainly in relation to fuel & energy prices volatility, as well as to optimize return on investment. In addition, it aims at reducing its carbon footprint as per EU and international standards and agreements.
    For 60 years, PPC has been one of the main strategic pillars of the Greek Economy. Today, and under the current international economic and market reality, PPC is seeking to maintain an attractive dividend policy for its shareholders, to ensure its growth and leading position in the domestic power and finally to retain competitive electricity prices and high quality services for its clients"

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ATHENS March, 30 2010                                                                     FROM THE PRESS OFFICE

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