September 24, 2019 / 5:49 PM / 20 days ago

UPDATE 2-Greek utility Public Power Corp shrinks first-half loss

(Adds minister’s quote)

ATHENS, Sept 24 (Reuters) - Greece’s biggest electricity utility Public Power Corp (PPC) on Tuesday posted a smaller loss in the first half of the year, thanks to lower costs for carbon emission rights and reduced discounts offered to customers.

PPC, which is 51% state owned, reported a net loss of 274.8 million euros ($302.25 million) in the first six months of the year versus a loss of 533.9 million euros in the same period last year.

PPC said it recovered part of the expense for CO2 emission rights via a clause for medium and high- voltage tariffs and also benefited from lower discounts offered to customers who pay on time.

PPC, with 77% of the domestic retail market, is seen as being key to the country’s energy security. A large loss it reported in 2018 and about 2.7 billion euros of unpaid bills accumulated during the Greek debt crisis have raised concerns over its finances.

The new conservative government which took power in July has pledged to turn PPC around and announced a recovery plan to help the troubled utility plug a cash shortfall estimated at more than 900 million euros.

Under that plan, PPC has increased electricity rates and has reduced discounts offered to customers who pay on time in September to help plug the shortfall.

The new administration will also settle about 200 million euros in subsidies owed to the utility in January, which is expected to significantly boost PPC finances, Chief Executive Officer Georgios Stassis said.

A previous auditor’s report for 2018 noted “material uncertainty” due to declining revenue and significant pre-tax losses. The auditor removed that reference from the first-half statements.

“We have worked relentlessly so that PPC escaped a collapse. The auditor’s report today shows that we have made it,” Energy Minister Kostis Hatzidakis told reporters.

Hatzidakis said the next steps included the partial privatisation of PPC’s power distribution grid and legislation for a more flexible governance.

PPC produces most of its power from coal-fired plants, while it has a very small share of 3% in renewables.

Addressing a United Nations summit in New York on Monday, Prime Minister Kyriakos Mitsotakis announced that PPC will phase out all its coal-fired plants by 2028 under a nationwide plan to cut carbon dioxide emissions and boost green energy.

$1 = 0.9092 euros Editing by David Evans

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