Electrica SA may make as much as 200 million euros in profits this year, a very high value among the remaining state-owned companies. So far only Banca Comerciala Romana (BCR) has posted net profits at similar levels (215 million euros in 2004).
Electrica incurred losses in its first three years of operation, but last year managed to post net profits of 80 million euros (3,214 billion ROL).
The company was also close to posting profits in 2003 but had to make provisions to offset the reassessment depreciation of its assets and the depreciation of its receivables. This resulted in losses of 179 million euros.
This year''s possible record profits will come from the sale of several Electrica branches, on the one hand, and from its core activity, a segment for which the company has already posted six-month net profits of 100 million RON (27.2m euros), on the other.
Electrica has already sold 24.62% stakes in Electrica Banat and Electrica Dobrogea to the Italian utilities group Enel. The 35m-euro deal was closed this spring.
Electrica will also receive a further 15 million euros from adjustments to the purchase price paid by Enel for the two branches.
The electricity distributor and supplier has also signed privatisation contracts for its Oltenia and Moldova branches with the Czech company CEZ and German group E.ON. This means Electrica will receive another 78 million euros when the transactions are concluded this autumn. Several extra million euros will also come from purchase price adjustments for these two transactions.
"These are taxable revenues, but they will account for a large part of Electrica''s consolidated income. Following the electricity price increases, tariffs are now covering the company''s costs for the first time in its history, which means that the core activity is profitable, as well," sources say.
The profits may be used to offset the company''s historical losses, which amounted to some 170 million euros (6,000 billion ROL) at the end of last year. On the other hand, the company will also be able to cut its indebtedness to its suppliers, the electricity producers.
The state owns 100% in Electrica SA through the Ministry of Economy and Commerce.
Electrica has been turning over up to two billion euros annually, rivalling the oil company, Petrom. adrian.mirsanu@zf.ro
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