Deregulation cuts Electrica Oltenia''s profit

Electrica Oltenia, the biggest electricity distributor in Romania in terms of number of customers, posted a net profit of about 7.4 million euros (26.8 million RON), five times lower than last year. Electrica Oltenia was taken over by the Czech company CEZ in October of last year. Turnover of the electricity distributor stood at about 1,500 million RON (416 million euros) last year, 1.5% less than in 2004. “Opening up the electricity market from 40 – 55% in 2004 to 84% in 2005 impacted greatly on the company”s electricity sales”, Gabriel Negrila, chief executive of Electrica Oltenia told ZF. “Once the market opened up, more suppliers emerged. Under the circumstances, some of the consumers chose another supplier than Electrica Oltenia”, he added. Gabriel Negrila, 51, functioned as a technical manager of the company until November 1, when he was appointed chief executive of Electrica Oltenia. The company budget for 2006 indicates a turnover of 1,600 million RON (440 million euros, at an exchange rate of 3.63 RON/EUR). The Czechs have invested about 80 million RON (22 million euros) since takeover, 15% less than the budget target set at the beginning of the year. ZF