Plummeting energy consumption triggers price hikes

The top three power generating companies in Romania were significantly hurt by the decline in power deliveries, as well as by the huge modernisation costs, with first-half profits being up to 21 times smaller than in the similar period of last year. Considering the up to 25% decline in power supply, keeping turnovers at a level similar to that recorded in the first six months of last year meant one thing: contract prices were renegotiated upwards.

The only two companies that managed to record slight rises in net profit and turnover were Nuclearelectrica and Hidroelectrica, as they levy the lowest prices on the Romanian market.

In all, the five companies accounting for the bulk of the power generation market in Romania – Nuclearelectrica, Hidroelectrica, and Turceni, Rovinari and Craiova Energy Complexes, posted cumulated turnover worth 3.4 billion RON (811.6 million euros) in the first six months of the year and net profits amounting to half as much as in the first six months of 2008.

“It is very difficult to make a forecast for the second half of the year. Who can predict what will happen? The only thing we can do is redistribute our expenses, as one would in a household. We see what we can buy and what acquisitions we can postpone,” says Gheorghe Davitoiu, general manager of CEN Rovinari.

The company reported a 415 million RON (98.1 million euros) turnover in the first six months of the year, 1.4% less than the 420.7 million RON (114.6 million euros) reported in the first six months of last year. However, the company recorded a staggering 21-fold profit drop, to just 2.1 million RON (0.5 million euros).

“Major costs were involved in modernising a group of the complex,” explains the representative of CEN Rovinari. The company delivered 4% less power in the first half of 2009 against the similar period of 2008.