In Q1 2024, Nuclearelectrica recorded a revenue decrease of 44% YoY, an EBITDA decline of 20%, and a net income of RON 563m, down 27% YoY.

Starting off with the revenue, it amounted to RON 1.17bn in Q1 2024, declining by 44% YoY. Total production amounted to 2,768 GWh, recording a negligible 0.1% decline YoY.

Of this quantity, 1,880 GWh, or 67.6% of the total, was sold via MACEE for the average price of RON 450/MWh, representing revenue of RON 846.4m. 886.6 GWH, or 31.9%, was sold on the competitive market for the average price of RON 354.7/MWh, representing revenue of RON 314.5m. 857 GWh, or 30.8%, was sold on the DAM and IDM, for the average price of RON 350.87/MWh, representing sales of RON 300.7m. Next up, sales under several different contracts, amounted to 29.7 GWh, representing 1.06% of the total sales, and this was sold for an average price of RON 465.9/MWh, for a total revenue of RON 13.8m. Lastly, 0.5%, or 13.7 GWh was the income from imbalances, which was sold for RON 667.04/MWh.

The weighted average sale price for electricity sold (excl. MACEE and PE) in Q1 was RON 354.52/MWh, while in Q1 2023 (excl. PE) it amounted to RON 1,009.89/MWh. A similar situation is present for sales on other markets and under other contracts. In other words, the main reason why revenue dropped so sharply YoY was due to the lower prices of electricity sold as compared to Q1 2023. However, it should be noted that Q1 2023 was significantly impacted by elevated energy/electricity prices due to the impact of the war in Ukraine, and the subsequent sanctions on Russia. As such, the decline in revenue is more of a “normalization” than anything.

Moving on, operating expenses amounted to RON 602.4m, decreasing by 54% YoY. The main reason for the decline was due to the lack of contribution to the Energy Transition Fund, which was RON 0 in Q1 2024, as compared to RON 840.8m in Q1 2023. This is related to the Government Emergency Ordinance that was in effect from 1 September 2022 until 31 August 2023, which stipulated that all the sales made at a price above RON 450/MWh, of which there were many in Q1 2023 would be taxed at 100%. Besides this, payroll expenses grew by 21% YoY to RON 168.5m, mainly as a result of higher salaries and wages. Finally, other op. expenses also recorded a notable 33% growth YoY, with the main drivers being expenses with energy and water, which grew by 55% YoY to RON 40.7m, as well as the increase in smaller not described expenses inside other op. expenses, which grew by 3x YoY to RON 23.5m.

As a result of the faster OPEX than revenue decline, EBITDA amounted to RON 767.3m, decreasing by 20% YoY. This would also imply an EBITDA margin of 65.4%, an increase of 19.89 p.p. YoY. In terms of the net financial result, it amounted to RON 69.6m, a decrease of 35% YoY, mainly as a result of lower fin. income, which declined by 27% YoY to RON 82m, as a result of lower interest income. The net fin. result was also negatively impacted by higher fin. expenses, which grew by 1.2x YoY to RON 12.7m, as a result of higher FX losses.

Due to the impact of revenue decline & a reduction in net fin. result, net income declined by 27% YoY to RON 563m, implying a net income margin of 48%, an increase of 11.5 p.p. YoY.

Nuclearelectrica key financials (Q1 2024 vs. Q1 2023, RONm)

Source: Nuclearelectrica, InterCapital Research

In Q1 2024, Electrica recorded a revenue decrease of 10.5% YoY, an EBITDA increase of 169.5%, and a net income of RON 127.7m, vs. a net loss of EUR 43m during the same quarter in the comparable period.

Recently, Electrica published its Q1 2024 preliminary results, and today we’re bringing you the highlights. In Q1 2024, Electrica distributed 4.41 TWh of electricity, representing an increase of 3.4% YoY. At these numbers, the Company serves 3.9m users, over an area covering c. 40% of Romania. In terms of the volumes of electricity supplied to final customers, this amounted to 2 TWh, decreasing by 5% YoY, as a result of the general downward trend of electricity consumption. Furthermore, Electrica Furnizare, one of the Group’s subsidiaries, supplies electricity to the competitive market, and also operates in the universal service and as a last resort. Also, this subsidiary is one of the largest suppliers in the supply market, with a total market share of app. 16%, and a market share of 10.4% in the competitive market, according to the latest report by ANRE (February 2024).

Moving on to financials, during 2023, Electrica recorded revenue of RON 2.2bn, declining by 10.5% YoY. Breaking this down into segments, the supply segment, which includes the revenues from electricity and natural gas supply decreased by 20.8% YoY to RON 1.61bn, due to the decrease in quantities of electricity supplied at -5% as well as lower purchasing cost for electricity. Electrica further notes that both in 2022 and 2023, the effect of the retail electricity prices was covered by subsidies received from state authorities, due to the elevated electricity prices recorded.

On the other hand, the distribution segment revenue recorded 31.9% growth YoY, to RON 1.1bn. This came mainly due to the significant increase in distribution tariffs, which were higher by app. 6.8% compared to the corresponding tariffs in Q1 2023.  As a result of the aforementioned developments, EBITDA increased by 169.5% YoY to RON 400.8m, implying an EBITDA margin of 17.9% (vs. 6% in Q1 2023). In terms of the net financial result, it amounted to RON 127.7m, vs. a net loss of EUR 43m in Q1 2023.

Electrica key financials (Q1 2024 vs. Q1 2023, RONm)

Source: Electrica, InterCapital Research

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