Hidroelectrica obtained a profit of 719 million lei in the first eight months of the year, 12% up compared to the result for the corresponding period in 2013, according to an official statement.

The main sources that generated this financial performance were represented, on the one hand, by the higher sales and, on the other hand, by the significant reduction in operating costs due to implementation of a successful strategy to control operating costs, the company’s representatives explained.

In fiscal year 2014 Hidroelectrica will have a record profit of over one billion lei

According to them, a restrictive policy on the company’s operating costs, accomodated the negative impact of tax for the special construction of 150 million lei, estimated for 2014.

In the first eight months of the year, Hidroelectrica produced and supplied 12.3 TWh, accounting for 88.5% of estimated production for the entire year. Now, it stands on a projected production of least 17 TWh for the entire 2014, 3.1 TWh more than budgeted production.

The increased amount of energy produced and delivered – 14.5% over the first eight months of last year – supported the increase in operating income, even amid adverse influences induced by the legislation and market conditions. Thus, the ANRE Orders for additional annual amount of energy delivered to the regulated market of 1.3 TWh and reduced selling price on the regulated market of 115 lei / MWh from 125 lei / MWh, as well as the production 18% decrease in average trading price of energy supply on PCCB compared to the previous year were unfavorable factors to Hidroelectrica’s activity.

“The production of at least 17 TWh by the end of the year, the implementation of effective strategies for the sale of all of the produced energy, the opening of trading offices in Hungary and Serbia, coordination of actions on the review of bank loan portfolio are all elements that will generate a record profit of over one billion USD for the fiscal year 2014,”Remus Borza, Hidroelectrica’s administrator, said.

“If Hidroelectrica would not pay RON 396 million for water, at the highest level of this tax in the European Union, if Hidroelectrica would not pay this tax pole [Special Construction Tax] of RON 150 million, if Hidroelectrica would not lose RON 220 million as a result of supplying energy on the regulated market, the company’s profit would be at least RON 1.8 billion, allowing the company to finance all investments for upgrading the existing production capacities and commissioning of new capacities,” Borza added.