Electricity producer and supplier Hidroelectrica has announced a new historic profit, recording a second consecutive year of huge growth. In 2023, net profit increased by 42%, from 4.4 billion lei to 6.3 billion lei, according to the company’s report. A year earlier, at the height of the energy crisis, growth was 45%. So it turns out that the huge energy crisis that Europe has been through has been good for energy companies, especially when we subsidize prices.

In the case of the profits recorded by Hidroelectrica, the biggest gainer is the Romanian state, i.e. the majority shareholder. The higher the profits, the more generous the dividends to shareholders, and in an election year like 2024, the increased revenue to the budget is a huge bet.

For Hidroelectrica, the restrictions imposed by the government GEO 27/2022 were favorable. Hidroelectrica must sell electricity at a price of 450 lei/MWh (90 EUR/MWh) in the centralized MACCE system. But in the meantime, spot prices across Europe have fallen significantly, reaching the level of €50/MWh.

Hidroelektrica – results for 2023

In its report, Hidroelectrica notes that its very good results are due “mainly to above-average high hydraulics and the execution of the strategy to increase the supply portfolio.”

Key indicators for 2023

• Electricity production increased by 30% compared to 2022

• Revenues increased by 30% compared to 2022 from 9.4 billion lei to 12.2 billion lei.

• Operating margin of 58%, which is 6% more than in the previous year

• Net profitability of 52%, up 10% from 2022

• Net profit increased by 42%, from 4,464 million lei to 6,337 million lei

• Earnings per share increased by 42%, from 9.95 RON/share to 14.11 RON/share.

Hydropower – increase in income from supply

According to Hidroelectrica, energy produced and sold increased by 30% (17,639 GWh) in 2023 from 13,544 GWh in 2022. Hidroelectrica shows that “this increase was mainly due to the improvement of hydrological conditions in 2023 compared to 2022, which led to the registration of production in 2023 above the multi-year average”.

“Taking into account a 30% surplus of production compared to the previous year, combined with the new operating conditions of the wholesale market (implementation from January 1, 2023 of MACEE), revenues related to these operations increased by 14% in 2023. compared to 2022. This growth was driven by a drop in the SPOT price of approximately 60% in 2023 compared to 2022,” Hidrolectrica also notes.

Revenues from the electricity supply business increased by 132% to 3.4 billion lei of revenue for the year ended December 31, 2023, from 1.5 billion lei of revenue in 2022. This evolution of revenues is due to the increase of the customer portfolio, as well as the average electricity sales price, Hidroelectrica also shows.