PPC’s recurring operating profit EBITDA in the first 9 months of 2021 amounted to 626.5 million euros, compared to 696 million euros in the first nine months of 2020 (-9.9%), showing significant resilience despite the energy crisis affecting the market. According to company sources, this resilience is a result of the company’s consolidation process that began in 2019 and is reflected in the stabilization of results based on the company’s business plan. The same sources point out that the target for recurring EBITDA remains close to last year’s levels, despite the fact that energy costs have increased by 167% in the third quarter. It is worth noting that 2021 is a year of historically high electricity wholesale prices in contrast to the extremely low prices of 2020. In any case, 2021 is characterized as a transition year aimed at the growth of the company, while the catalyst for maintaining profitability is hedging strategy followed.
It is noted that the participation of lignite decreased to 21% of PPC production from 26%.
In terms of published figures, the company’s turnover in the 9 months amounted to 3,697.5 million euros (compared to 3,520.1 million euros last year, an increase of 5%) and to 1,504.1 million euros in the third quarter ( compared to 1,270.5 million last year (an increase of 18.4%). The published 9-month EBITDA amounted to 576.9 million euros (from 708.3 million euros last year, – 18.55%), while the published third-quarter EBITDA amounted to 142.9 million euros (from 222.5 million euros last year, -35.7%).
9-month pre-tax results amounted to losses of 85 million euros (from profits of 46.4 million euros last year), while pre-tax results for the third quarter amounted to losses of 98.8 million euros (from losses of 4.6 million euros last year). The nine-month results after taxes amounted to losses of 42.2 million euros (from profits of 12.8 million euros), while the results for the quarter after taxes amounted to losses of 69.1 million euros (from losses of 16.5 million. euro)
In more detail, according to the announcement of PPC, Earnings before interest, taxes, depreciation and amortization (EBITDA) on a recurring basis amounted to € 626.5 million in the nine months of 2021 compared to € 696 million in the nine months of 2020 for the Group as a whole. with the corresponding margin being 16.9% from 19.8%. Specifically for the third quarter of 2021, EBITDA on a recurring basis amounted to € 155 million compared to € 238.7 million in the corresponding quarter of 2020.
The increased costs due to the rise in gas prices and CO2 emission allowances and consequently to the prices of the wholesale electricity market, negatively affected the operating profitability of the Trading activity. This negative impact was largely offset by the increase in average revenue as well as by the improvement of the energy mix of Production activity. In addition, the implementation of operations to compensate for the risk of fluctuations in electricity and gas prices had a positive effect.
The nine-month EBITDA of 2021 as well as that of the nine-month period of 2020 was also affected by some one-off effects. Taking into account these effects, EBITDA amounted to € 576.9 million compared to € 708.3 million in the first nine months of 2021.
The results after taxes amounted to losses of € 42.2 million against profits of € 12.8 million in the first nine months of 2020. Respectively for the third quarter of 2021 the results after taxes amounted to losses of € 69.1 million against losses of € 16.5 million in the third quarter of 2020.
Impact of the COVID-19 pandemic
The COVID-19 pandemic continues in 2021 to affect global social and economic life. In Greece, after the resumption of restrictive measures from October 2020 until about the end of March 2021, from mid-April 2021 the traffic restriction measures gradually began to be lifted as a result of the mass vaccination program implemented, while there was an almost complete release. the operation of stores.
The overall final economic impact, from the COVID-19 pandemic, on the global and Greek economy and business activities, can not be estimated at present, due to the high degree of uncertainty resulting from the inability to predict the final outcome, but also due to of its secondary effects listed above. In any case, the Management of the Group and the Parent Company continuously monitors the developments on the COVID-19 front and evaluates any possible further effects on the operation, the financial position and the results of the Group and the Parent Company, being in a state of increased vigilance. to take further appropriate precautionary measures to safeguard the liquidity and business activities of the Group and the Parent Company.
Managing the effects of the energy crisis
During the second half of 2021 and while the effects of the COVID-19 pandemic continue to exist and affect social and economic life, a major energy crisis is unfolding, which, combined with the existing inflationary pressures, threatens to slows down economic growth. These developments directly affect the wholesale electricity market, with prices on the Energy Exchange in the third quarter of the year increasing by up to 167%, which poses significant challenges for both suppliers and consumers of electricity.
Having timely diagnosed the negative developments in the energy markets, the Group was directly active in the Greek and European commodity markets, through derivative financial instruments, with the aim of compensating as much as possible the risk of price changes in the commodity markets and protecting its profit. .
Commenting on the financial results, the President and CEO of PPC SA K. George Stassis stated:
“In the third quarter of the year, despite the continuing rise in gas and electricity prices, we demonstrated the necessary social sensitivity to help our customers, and at the same time we managed to maintain the resilience of our performance in terms of operating profitability, in 2021 is a transitional year for PPC. resumption of operating profitability close to 2020 levels.
We increased the investments for the strengthening and the modernization of the Distribution Network and we continued the transformation of our Commercial activities. At the same time, we further expanded our portfolio for projects in Renewable Energy Sources by approximately 3GW, reaching 10 GW, with our entry into new technologies such as storage and floating photovoltaics.
We have successfully completed the share capital increase of € 1.35 billion, a milestone development for PPC, which will allow us to implement faster our business plan for the energy transition, the increase of power in Renewable Energy Sources and the acceleration of our transformation into a green, digital energy company. In addition, through this transaction, we expanded our share base and increased the free float in our stock, while we also joined the MSCI index.
The progress made was also acknowledged by S&P, which a few days ago confirmed the rating “B +” with positive outlook, noting that it could further upgrade PPC’s credit rating to BB- in the next 6-12 months. provided that PPC implements its plan and the operating efficiency remains the same or the Hellenic Republic is upgraded to BB +. ”
Source From: Capital