by PPC announced an increase in operating and net profitability, investments and renewable energy projects under construction for the first quarter of the year.
The organization notes that from 2024, it will resume distributing dividends to shareholders based on that year’s profitability which should, on an operational basis, exceed targets.
In particular, operating profit (EBITDA) amounted to 280 million euros this year, compared to 170 last year (up 65%), and pre-tax profit to 73.3 million against losses of 30.3 million last year.
Investments amounted to 195.5 million compared to 102 million in the first quarter of 2022, mainly due to the increase in investments in projects for the distribution network, RES projects as well as in the new natural gas plant of 840 MW in Alexandroupoli. Net debt decreased to €2 billion, from €2.13 billion in March 2022. Also in the first quarter of 2023, provisions for bad debts from customers increased by 34.1 million, compared to an increase of 45 .9 million in the corresponding quarter of 2022.
The evolution of profitability
Increase in operating profitability for the first quarter of 2023, due to the reduction in operating expenses, and mainly expenses for purchased energy, natural gas and CO2 emissions present PPC.
More specifically, earnings before interest, taxes, depreciation and amortization (EBITDA) on a recurring basis amounted to €280.5 million, up €110.5 million (65%) compared to the corresponding period. of 2022.
Pre-tax income was 73.3 million euros in profits compared to 30.3 million euros in losses in the first quarter of 2022.
The results after tax amounted to 51.1 million euros compared to a loss of 185.7 million euros in the first quarter of 2022.
Commenting on the financial results, PPC SAM President and CEO Georgios Stassis said:
“The first quarter results confirm the development path that PPC has embarked on and lay the foundation for a return to dividend distribution, starting in 2024 based on current year profitability. For another quarter, by implementing our business plan, we continued to increase investments in projects that make our energy mix greener, strengthen and modernize the electricity distribution network and contribute to the digitalization of all our activities .
Above all, for our plan for renewable energy sources, after having reached the target of 600 MW concerning projects in Greece, in operation or built, the construction of the large photovoltaic park of 550 MW in Ptolemaida has started, currently having projects with a total capacity of 1 GW under construction. This is a total capacity of 1.6 GW, which is about 30% of the 5 GW target we have set for 2026.
At the same time, we continue to invest in improving our customers’ experience by offering a broader set of solutions, both physical and digital, to make PPC the best destination for energy-related services. . In this sense, we continue to develop our branch network across the country, we continue to introduce more tools to help our customers pay their bills, while also developing our digital services such as the new myDEI platform, the use of e-Contracting for new sales, as well as the growing popularity of e-SelfMetering, confirming that PPC transformation is now largely a reality.
Over the full year, we expect to exceed the initial target that we had set for recurring EBITDA of 1.1 billion euros and approach 1.2 billion euros. PPC, after a year full of challenges, is resolutely pursuing the implementation of the transformation plan with investments both in Greece and abroad, with the ultimate goal of transforming it into a leading company in the field of clean energy in South East Europe.”
Functional sizes
In the first quarter of 2023, domestic electricity demand decreased by 11% compared to the corresponding period of 2022 (13,204 GWh compared to 14,828 GWh) due to the drop in consumer demand due to the energy crisis and the incentives provided by the State for energy savings, as well as due to milder weather conditions in the first quarter of 2023 compared to the corresponding period of last year. At the level of total demand, ie including electricity for exports, a drop of 11.9% was recorded.
PPC’s average supply market share across the country fell to 60.9% in the first quarter of 2023 from 64% in the corresponding quarter of 2022. In particular, the average market share in the system interconnected fell to 61.5% in March. 2023 (compared to 64.4% in March 2022), while the average share by trend was 83.9% (compared to 90.9%) in high trend, 33.6% (compared to 40.5%) in trend average and 65.2% (against 66%) in the low trend. Tension.
In power generation, the average share of PPC fell to 39.2% in Q1 2023 from 46.9% in Q1 2022, mainly due to lower production from natural gas power plants.
PPC Group Operating Revenue and Expense Analysis
Income
Revenue decreased in the first quarter of 2023 by €254.5 million or 11.3% mainly due to lower electricity sales volume due to lower domestic demand, as well as the decline in market share in the supply of electrical energy.
Operating costs
Operating expenses before depreciation and amortization in the first quarter of 2023 decreased by 17.6% (1,712.3 million euros compared to 2,077.3 million euros), mainly due to the aforementioned reduction in purchasing expenses natural gas, energy and CO2 emission rights.
Energy mix expenditure
Expenditure on liquid fuels, natural gas, CO2, lignite purchases from third parties and electricity decreased by 385.1 million euros (22.6%) compared to the first quarter of 2022.
Wage costs
Personnel costs remained essentially stable at €180.5 million in Q1 2023 with a regular employee headcount of 12,953 employees (compared to 12,493 employees at the end of Q1 2022).
Predictions
In the first quarter of 2023, bad debt provisions increased by €34.1 million compared to an increase of €45.9 million in the corresponding quarter of 2022.
Investments
Total investments in Q1 2023 amounted to €195.5 million compared to €102 million in Q1 2022. As can be seen in the table below, a large part of the increase is due to the increase in investments in projects for the Distribution Network, RES projects as well as the new 840 MW natural gas power plant in Alexandroupoli.
The composition of the main investments is as follows:
Net debt
Net debt as of 03.31.2023 amounted to 2,030.4 million euros, an increase of 642.3 million euros compared to 12.31.2022 (1,388.1 million euros), due to the impact of negative working capital in the first quarter of 2023 which was mainly affected by the payment of CO2 emission rights for the compliance of the year 2022, which is carried out annually until the end of March ‘Next year.
Here is the evolution of the Net Debt:
APPENDIX II – Definitions and convention of Alternative Performance Measurement Indicators (“ALPI”)
ALTERNATIVE PERFORMANCE MEASURES (“ALPI”)
The Group uses Alternative Performance Indicators (“ALPI”) when making decisions regarding its financial, operational and strategic planning, as well as for evaluating and publishing its performance. These EDMAs provide a better understanding of the Group’s financial and operating results, its financial situation and the cash flow statement. Alternative indicators (EDMA) should always be taken into account together with the financial results prepared in accordance with IFRS and in no way replace them.
Alternative Performance Measurement Indicators (“APM”)
To describe the Group’s performance, “adjusted” indicators are used such as: Recurring EBITDA excluding non-recurring effects, Recurring EBITDA margin % excluding non-recurring effects and Profit/(Loss) excluding non-recurring effects. These indicators are calculated by subtracting financial indicators, which have been calculated from the funds of the annual or semi-annual financial statements, the effect and costs resulting from events occurring during each reference period and which did not affect amounts from previous periods.
EBITDA (operating profit before depreciation, net financial charges and taxes)
The EBITDA indicator makes it possible to better analyze the Group’s operating results and is calculated as follows: Total revenue minus total operating expenses before amortization and depreciation. EBITDA margin (%) is calculated by dividing EBITDA by total revenue. The calculations are shown in Table A.
Operating expenses before depreciation and amortization, total net financial expenses and gains/(losses) of associates without exceptional items
This ratio results if, from the “Operating expenses before depreciation and amortization” line of the EBITDA table as presented above, the one-off effects mentioned in the recurring EBITDA note below are subtracted. The index is shown in Table B.
Recurring EBITDA (Ratio of operating profit before depreciation, net financial expenses and taxes)
Recurring EBITDA makes it possible to better analyze the Group’s operating results, excluding the impact of non-recurring effects. For the three-month period ended March 31, 2022, as well as for the three-month period ended March 31, 2023, there were no one-time effects. Recurring EBITDA margin (%) is calculated by dividing recurring EBITDA by total recurring revenue. The calculation of recurring EBITDA and recurring EBITDA margin is shown in Table C.
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EBIT (operating profit ratio before net finance costs and tax)
The EBIT indicator makes it possible to better analyze the Group’s operating results and is calculated as follows: EBITDA (Index of operating profits before depreciation, net financial expenses and taxes) less the amounts of depreciation and any depreciation. EBIT margin (%) is calculated by dividing EBIT by total revenue. The calculations are shown in Table D.
Amount net of amortization of financial charges and profits of partners.
This index is calculated as the compensation of the net amount of depreciation, net financial charges and profits/losses of the Group’s affiliated companies. The calculations are shown in Table E.
Net loan
Net debt is a measure used by management to assess the Group’s capital structure and indebtedness. Net debt is calculated by adding to long-term borrowings the short-term portion of long-term borrowings and short-term borrowings, by deducting from the total cash and cash equivalents, the allocated deposits related to loan contracts and financial assets valued at fair value through comprehensive income and adding the non-amortizable portion of loan origination costs. The calculations are shown in Table F.
