In 9M 2022, Nuclearelectrica recorded an operating revenue increase of 125% YoY, an EBITDA growth of 126%, and a net profit of RON 1.94bn, an increase of 203% YoY.
During the 9M 2022, Nuclearelectrica recorded an op. revenue increase of 125% YoY, amounting to RON 4.9bn. The increase was driven by the increase in revenue from the sale of electricity, due to the 138.2% increase in the weighted average selling price of electricity, including the transmission to power grid tariff (transmission tariff “Tg”).
In terms of the quantity sold, the Company sold a 4.1% lower amount of electricity due to lower electricity production by 2.1%. In 2022, the planned shutdown of Unit 1 took place, with a longer-than-planned shutdown of Unit 2 in 2021, which influenced the decrease in production. The amount of electricity sold on the competitive market of bilateral contracts decreased by 4% YoY, while the average selling price on this market increased by 113% (price without Tg). The amount of electricity sold by SNN on the spot market (DAM and IDM) decreased by 5.5%, while the average selling price increased by 256% YoY.
Meanwhile, OPEX (excl. depreciation and additional income tax expense) increased by 36.9%, and amounted to RON 1.39bn, mainly as a result of the increase in expenses regarding the purchased electricity, as well as the increase in personnel expenses.
The additional income tax expense referred to here, is the tax that was recently changed due to the current situation in the energy sector. In the period 1 January – 31 August 2022, the additional income which came from the difference in the average monthly electricity selling price, and the price of RON 450/MWh were taxed at 80%. Starting with 1 September 2022, this was replaced by the solidarity contribution, amounting to 100% of the difference between the average monthly electricity selling price and the price of RON 450/MWh. This change is in place until 31 August 2023. What this means for SNN, is that it had to pay RON 872.9m of additional expenses, on top of the OPEX.
Even with this increase, the EBITDA still grew strongly, growing by 126% YoY and amounting to RON 2.65bn. This would imply an EBITDA margin of 53.95%, an increase of 0.34 p.p. YoY, which just means that both the revenue and op. profitability grew proportionally. Because of this, the EBITDA growth can solely be attributed to the top-line growth. The financial income for the period amounted to RON 72.5m, an increase of 426%, mainly as a result of higher interest income, but also supported by FX differences. Financial expenses also grew, to RON 8.4m, an increase of 45% YoY. This would mean that during the period, the net financial result amounted to RON 64m, an increase of 7x YoY. As a result of the higher earnings, tax expense amounted to RON 373m, an increase of 184% YoY. Finally, the net income for the period amounted to RON 1.94bn, an increase of 203% YoY.
Nuclearelectrica key financials (9M 2022 vs. 9M 2021, RONm)
Source: Nuclearelectrica, InterCapital Research
The investment of the Company is set at RON 609.2m for 2022, which is an increase of 44% YoY. In the 9M 2022, they managed to achieve 69.3% completion of this planned investment. The investments were made into the production continuity of the Company’s branches, in order to achieve the highest possible level of production capacity utilization, as well as to maintain the long-term maintenance of the plant.
Nuclearelectrica also commented on the impact of the Ukraine conflict on its operations. They concluded that there is no direct exposure related to Russia or Ukraine, nor do they hold any direct or indirect investments in companies in these countries. The supply chain for raw materials is maintained this year with companies established in Kazakhstan and Romania. Furthermore, SNN has no exposure to businesses, companies, or banks which are currently affected by international sanctions. The indirect effect, however, is the same one all other companies are experiencing: electricity sale price growth, national policies for mitigating the effects of the Ukraine war, and the CPI evolution.
