In Q1 2025, Electrica recorded revenue growth of 13% YoY, an EBITDA increase of 15%, and a net income to majority of RON 195.7m, a 53% increase YoY.

Starting off with the revenue, it amounted to RON 2.5bn, growing by 13% YoY. To understand this, one has to look closer at the segment breakdown, i.e. electricity distribution and electricity supply segments. In the distribution segment, revenue grew by 14.8% YoY to RON 1.3bn, of which RON 684m were the revenues with external customers, mainly as a result of the 4.8% increase in the volume of electricity distributed, combined with the increase in tariffs of 12.5% starting on 1 January 2025.

In the supply segment, revenue grew by 12.6% YoY to RON 1.8bn, mainly as a net effect of the following three categories:

1. Increase in the quantity of electricity supplied on the retail market by 3.7%
2. The increase in the purchase cost, which resulted in higher subsidy revenues (RON 623m in Q1 2025 vs. RON 302m in Q1 2024)
3. And a change given by the new ANRE guide from 29 July 2024, regarding the new calculation of the amounts to be recovered from the cap

Supply of natural gas revenue also grew by 40% YoY to RON 90.5m, driven primarily by higher volumes, but also better margin dynamics due to the tight winter energy market. In terms of operating expenses, in total they amounted to RON 2.86bn, growing by 23% YoY. Breaking this down by growth drivers, the largest increase was recorded in the “Electricity, gas, merchandise purchased”, which grew by 36% YoY to RON 2.1bn, due to higher energy procurement prices, especially under the capped pricing system, increase in the volumes supplied (+3.7% YoY), as well as higher natural gas procurement costs, in line with increased gas sales.

Employee benefits grew by 15% YoY, due to wage inflation and additional personnel employment, especially in the renewable energy segment. Repairs, maintenance, and materials costs also grew by 120% YoY to RON 37.1m, mostly due to higher maintenance activities (tied to CAPEX growth), expanded field operations across the grid, but also inflationary impact on materials and spare parts. On the other hand, construction costs related to concessions declined by 18% YoY to RON 185.5m, and this item reflects investment-related work on concession assets. The decrease here came by the timing and scale of execution of grid modernization investments, despite full CAPEX commissioning, which would imply fewer high-cost construction phases occurring in Q1 2025.

As a result of these developments, EBITDA amounted to RON 459m, growing by 15% YoY, and implying an EBITDA margin of 18.2%, a 0.28 p.p. increase YoY. Net financial result remained mostly flat YoY (RON 79.6m vs. RON 79.5m in Q1 2024).

Lastly, net income to majority amounted to RON 195.7m, growing by 53% YoY, faster than the op. income growth, and implying a net income margin of 7.77%, a 2.05 p.p. increase YoY. The faster growth came mostly due to one-off effects recorded in Q1 2024 and Q1 2025. For example, 2024’s tax base included non-recurring tax effects that elevated the effective tax rate; deferred tax dynamics also offset the impact of higher EBT in Q1 2025, leading to an overall lower effective tax rate (16.3% in Q1 2025, – 8.5 p.p. YoY).

Electrica key financials (Q1 2025 vs Q1 2024, RONm)

Source: Electrica, InterCapital Research

In terms of CAPEX, total executed CAPEX in Q1 2025 amounted to RON 220m, a 9.4% decrease YoY, while the commissioned CAPEX amounted to RON 85.7m, a 22% increase YoY. Breaking this down by segment, CAPEX in the distribution segment amounted to RON 200.7m, in renewables RON 6.2m, while in external maintenance services it amounted to RON 8m. Furthermore, 100% of planned commissioning (RON 85.7m) was delivered. Furthermore, the regulated asset base (RAB) was estimated at RON 8.4bn at the end of Q1 (RAB is the total value of the utility’s assets, that are used to provide regulated services, something that is approved by the regulator (ANRE), and allows the setting of allowed revenues via tariffs, determine the return on capital, and recover depreciation of assets over time). All CAPEX activities increase this base, which in turn, allows Electrica to earn more.

Besides this, Electrica provided an update on its renewable investments, which have app. 300 MW of power generation in various stages. Key updates include:

1. Vulturu Solar Project (12 MWp), which was connected to the grid last year, with trial tests completed, a certificate of compliance issued, and is currently operating in the testing phase
2. Satu Mare 2 Solar Project (27 MWp), which entered into the final execution phase, is awaiting the completion of grid connection infrastructure by the DSO, with next steps including compliance testing and commercial licensing.

Electrica also noted the new syndicated loan it signed on 30 April 2025, in the amount of RON 3.1bn, with the objective of supporting the CAPEX program, renewables, and working capital.