JERUSALEM, May 30 (Reuters) - State-run Israel Electric Corp (IEC) reported on Wednesday a huge loss in the first quarter, hurt by higher fuel costs and a new pension agreement with workers.
IEC, Israel’s main electricity provider, posted a quarterly loss of 1.47 billion shekels ($379 million) against profit of 147 million a year earlier.
The company recorded a 72.4 percent jump in the cost of fuel to 3.88 billion shekels, largely due to a halt in the supply of natural gas from Egypt -- which was 40 percent of IEC’s gas needs. The rest comes from natural gas wells off Israel’s Mediterranean coast.
IEC has been forced to turn to more expensive fuel sources such as fuel oil and diesel to generate electricity.
“The company is dealing with a cash flow crisis ... that is due to many difficulties in gas supply,” said Yiftach Ron-Tal, IEC’s chairman.
IEC officials noted that electricity reserves were very low heading into the peak summer months.
In the first quarter, electricity demand grew about 10 percent. Revenue rose 25.3 percent to 6.45 billion shekels.
IEC said its results were hurt by a new agreement linking pension payments to the consumer price index that led to an extraordinary expense of 1.5 billion shekels in the quarter. (Reporting by Steven Scheer)