During 9M 2023, Nuclearelectrica recorded revenue growth of 15% YoY, an EBITDA decrease of 5%, and a net income of RON 1.94bn, a 2% increase YoY. Furthermore, in Q3 2023, the revenue increase amounted to 6% YoY, EBITDA declined by 5%, while the net income amounted to RON 687.8m, a 4% decrease YoY.
Starting off with the revenue, it amounted to RON 5.55bn during 9M 2023, a 14.8% increase YoY. Meanwhile, during Q3, it amounted to RON 1.85bn, a 6% growth YoY. This increase came on the back of a 15.5% increase in the weighted average price, including Tg, of electricity sold compared to the same period in 2022, as well as a 2.9% increase in quantities of electricity sold. A key change in the sales mix during 9M 2023 is represented by the introduction of the Centralized Electricity Purchase Mechanism “MACEE”, set up from 1 January 2023 until 31 March 2025, which SNN is a part of. This refers to the sale of electricity to OPCOM S.A., a sole purchaser, for the price of RON 450/MWh. During 9M 2023, SNN sold via MACEE 3.38m MWh at the price of RON 450/MWh, accounting for 44% of total electricity sold. On the other hand, the quantity of electricity sold by SNN on the spot market (PZU and PI) grew by 0.5%, accounting for 13.7% of the total sold quantity, and the avg. selling price that was 57% lower. A similar trend was recorded during Q3, and as such the revenue grew by 6% YoY to RON 1.85bn.
In terms of operating expenses, in total, they amounted to RON 3.6bn during 9M, a 33% increase YoY, and to RON 1.14bn during Q3, a 17% increase YoY. The largest increase came from the tax on additional income, which increased by 136% YoY during 9M to RON 2.06bn, and by 108% YoY during Q3 to RON 597.6m. This tax refers to the regulation that was applied due to the energy shocks caused by the war in Ukraine, but also the energy transition. This regulation applied an 80% tax on additional revenue above RON 450/MWh during 9M 2022, and 100% during 9M 2023. As a result, the tax increased significantly. On the other hand, growth was offset by the lower electricity purchased cost, which decreased by 92% YoY to RON 38.7m during 9M, and by 89% YoY to RON 24.6m during Q3. Personnel expenses also grew, by 18% YoY to RON 449m during 9M, and by 22% YoY to RON 167m during Q3, above the inflation in Romania.
In fact, excluding the effect of the additional income tax, OPEX decreased, by 15.6% and 21.2% during 9M and Q3, respectively. Due to the faster overall OPEX than revenue growth, EBITDA amounted to RON 2.5bn during 9M, and RON 890m during Q3, a 4.9% and 5.3% decrease, respectively. This would also mean that the EBITDA margins declined on both 9M and Q3 basis, by 9.5 p.p. and 5.8 p.p., to 45.4% and 48.2%, respectively. Moving on to the net financial result, it improved by 154% YoY to RON 291m during 9M, and by 27% YoY to RON 81m during Q3, on the back of higher financial income (9M 2023: +127% YoY, Q3 2023: +23%), and lower financial expenses (9M 2023: -8% YoY, Q3 2023: -2% YoY). As a result, the net income also improved, at least on the 9M basis, growing by 1.9% YoY to RON 1.98bn. On the other hand, it declined by 4.2% YoY to RON 687.8m during Q3. Due to these developments, the net income margins declined, on both 9M and Q3 basis. During 9M, it amounted to 35.6%, a 4.5 p.p. decline, while during Q3, it amounted to 37.2%, a 4 p.p. decrease YoY.
Nuclearelectrica key financials (9M 2023 vs. 9M 2022, RONm)
Source: Nuclearelectrica, InterCapital Research
Nuclearelectrica key financials (Q3 2023 vs. Q3 2022, RONm)
Source: Nuclearelectrica, InterCapital Research
In terms of investments, during 9M 2022, they amounted to RON 455.5m, a 17% increase YoY, and 64% of the FY 2023 target (RON 710.3m). These investments include projects required at the Cernavoda NPP Branch, the Pitest NPP Branch, and the Head Office which is estimated to be completed by the end of 2023, as well as investment objectives to be completed in the coming years.
