Greek PPC’s first half results show heavy losses on carbon costs and strikes
Greek power incumbent PPC’s results for the first half of 2008 showed sizeable losses due to increased carbon costs, a lengthy strike by its workers and soaring energy costs.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the first half of 2008 amounted to EUR 222.2 million, down 51.3% from EUR 456.4 million the previous year. The net result for the first half of 2008 was a loss of EUR 111.8 million, comparable to net profits of EUR 99.4 million in the corresponding period last year.
Production
Hydro production fell year-on-year in the first six months of 2008, according to PPC, even though production in the first half of 2007 was already far lower than seasonal norms due to low reservoir levels.
Production from PPC’s main source – lignite-fired generation – fell 7.7% year-on-year in the first half of 2008, to 1,149 GWh. According to the company, this was due to a strike in March, lengthy maintenance on several generators and what was described by PPC as a “takeover of a plant by a group of local residents.”
The gap in lignite production was filled by generation from natural gas and oil. PPC was therefore heavily exposed to the recent price hikes on the two fuels and estimated expenditure on these feedstocks was up EUR 421.5 million, compared with the same period last year. PPC estimated that 51% of revenues were adversely affected as a result.
Carbon
Being so heavily dependent on its lignite generation fleet, PPC also found itself increasingly exposed to carbon prices. In its financial statement, the company said its results were impacted by a provision of EUR 56.9 million for CO2 emissions rights. FSJ
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