By Harry Floudopoulos
There has been a lot of talk in recent weeks about the famous skyrocketing profits in the electricity market, that is, the profits made for electricity producers due to the high prices prevailing in the wholesale market. The assumption is relatively simple: as wholesale electricity prices are set by gas units at extremely high levels, other technologies enjoy high super-profits as prices outperform variable costs. In the case of the Greek market, the famous skyrocketing profits concern lignite and hydroelectric plants.
In this light, the results of the energy companies with a presence in the electricity generation and especially the results of PPC, which has lignite and hydroelectric units, were presented in the previous days. Indeed, the results of PPC record a significant increase in EBITDA profitability in the production sector, which from losses of 145 million euros in 2020 shows profits of 643 million euros in 2021.
However, these profits are overshadowed by the marketing sector which from profits of 576 million euros, in 2021 shows losses of 202 million euros. It is worth noting that the total discounts offered by the company to its customers in the second half of 2021, in order to mitigate the effects of the energy crisis reach 800 million euros. In simple words, PPC’s benefits to its customers exceed the profits of 643 million euros that the company showed in production in 2021.
The picture is the same in other energy companies, where any profits recorded in the production sector are “cut” or even zeroed by the poor performance of the supply sector, this is true for companies such as Mytilineos and Motor Oil Hellas, as shown and the results of the year 2021 that were announced.
Indicatively, Mytilineos showed negative EBITDA of 61 million euros in electricity supply, which exceeded the increase of EBITDA in electricity production (155 million euros compared to 114 million euros in 2020).
Respectively, Motor Oil showed negative EBITDA by 8 million euros in the fourth quarter of 2021 (compared to profits of 1 million euros last year) while in total the year EBITDA in the electricity sector amounted to 2 million euros compared to 15 million euros in 2020 mainly due to the weak performance of NRG, which outperformed the profits from the production sector.
In any case, it is clear that in the difficult times we are going through with the energy crisis, the companies themselves are affected, which, among other things, are called to operate with much greater needs for working capital, significantly squeezing their margins in the supply sector and in production do not show super profits, as the impression is wrongly created.
Source: Capital
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