During 9M 2023, Hidroelectrica recorded revenue growth of 32% YoY, an EBITDA increase of 35%, and a net income of RON 5.18bn, a 42% increase YoY. Meanwhile, during Q3 2023, the Company recorded a revenue increase of 12% YoY, an EBITDA growth of 27%, and a net income of RON 1.24bn, a 30% increase YoY.
Starting off with the revenue, it amounted to RON 9.55bn during 9M 2023, a 32% increase YoY, and RON 2.58bn during Q3 2023, a 12% increase YoY. The Company recorded 38% higher electricity production YoY during 9M, and it amounted to 14.2k GWh. Furthermore, they bought 1.3k GWh of electricity as well, which meant that they were able to record total sales of 15.4k GWh. During Q3, a similar trend is recorded, with 19% higher electricity production, and 26% higher electricity sales. All of these factors combined led to the aforementioned increases in revenue during the 9M and Q3 periods.
The higher electricity production was positively influenced by high hydraulics compared to last year, which was a period characterized by a severe drought. By the end of the year, Hidroelectica estimates a total electricity production at 17.3 TWh (previously: 16.3 TWh).
Hidroelectrica revenue composition breakdown (9M 2023 vs. 9M 2022, RONm)
Source: Hidroelectrica, InterCapital Research
In terms of OPEX, in total, they amounted to RON 3.6bn during 9M 2023, a 21% increase YoY, and RON 1.16bn during Q3 2032, a 5% decline. Breaking this down further, the largest increase came from the transport and distribution of electricity, which grew by 152% YoY, or RON 500m to RON 829m during 9M 2023, and by 150% to RON 195m during Q3. This came as a result of the increase in the quantities of electricity delivered, as well as regulated tariffs. The next largest increase came from the turbinated water category, which grew by 49%, or RON 166m YoY to RON 506m during 9M, and by 32% YoY to RON 128m during Q3. This also is tied to the higher amount of processed water used to produce electricity, as well as the increase in the tariff set by ANAR to RON 1.4 per thousand cubic meters (9M 2022: RON 1.23 per thousand cubic meters). Other op. expenses also grew, by 107% YoY to RON 259m during 9M, and by 127% to RON 102m during Q3. There are several reasons for this, including the increase in expenses with services purchased by the Company as Balance Responsible Party, as well as the movements in provisions during 9M 2023, and the increase in expenses for services due to inflation. Employee benefit expenses and green certificates expenses also grew, by 20% YoY to RON 515m, and by 59% to RON 210m during 9M 2023, respectively. Employee benefits grew due to salary increases and an increase in the number of employees, while new green certificates had to be purchased to cover the consumption of final customers. On the other hand, tax for electricity producers decreased by 57% YoY to RON 221m during 9M, while it was absent during Q3 2023 (Q3 2022: RON 119m).
Hidroelectrica operating expenses composition breakdown (9M 2023 vs. 9M 2023, RONm)
Source: Hidroelectrica, InterCapital Research
As a result of these developments, the Company’s EBITDA grew by 35% YoY to RON 6.58bn during 9M, and by 27% YoY to RON 1.6bn during Q3 2023. This would also mean that the EBITDA margin improved, by 1.43 p.p. to 68.9% during 9M, and by 7.39 p.p. to 63.2% during Q3. In terms of the net financial result, it amounted to RON 202.7m during 9M, a 48% increase YoY, and RON 44.4m during Q3, a 33% decline YoY. The 9M increase came due to a higher financial income increase (+48% YoY, or RON 77.8m) than the financial cost growth (+50% YoY, or RON 12m). On the other hand, in Q3, financial income decreased by 24% YoY, while financial costs increased by 42%. Due to these developments, Hidroelectrica recorded a net income of RON 5.18bn during 9M 2023, a 42% increase YoY, and RON 1.24bn during Q3 2023, a 30% increase YoY. This would also mean that the net income margin amounted to 54.3% during 9M, a 3.81 p.p. increase, and 48% during Q3, a 6.78 p.p. improvement YoY.
Hidroelectrica key financials (9M 2023 vs. 9M 2022, RONm)
Source: Hidroelectrica, InterCapital Research
In terms of investments, during 9M 2023 Hidroelectrica invested RON 129m, a 2% increase YoY. Of this, Development Project CAPEX decreased by 29% YoY to RON 44m. This decrease is expected, as Hidroelectrica has various projects in different stages of development, and as such its CAPEX is under the influence seasonality effects. Maintenance CAPEX on the other hand, increased, by 63% YoY to RON 37m. This came as a result of a 51% more services/maintenance works with capitalization, but also due to a 8% increase in the value of services performed with Hidroserv in 2023 YoY.
