Nuclearelectrica Has Currency Risk Weigh In On Its First-half Profit

08.14.2015 By Bogdan Neagu

Romania’s nuclear power producer Nuclearelectrica (SNN.RO) Friday posted a large decline in its first-half net profit as higher financial costs more than offset an increase of its operating profitability.

Nuclearelectrica reported net profit of 2.9 million lei (EUR0.6 million), down 81% from RON15.4 million in January-June 2014.

The company said its earnings before interest, tax, depreciation and amortization increased 22% on the year to RON248.9 million mostly due to lower operating costs. The operating expenditure fell 6% due to the reduction of a special construction tax introduced last year, and lower costs with spare parts, the company said in its financial report.

The operating revenue inched higher due to higher sale prices, while electricity quantities produced and delivered fell slightly.

However, the final result was impacted by an 84% rise in financial costs compared with the first half of 2014, as the company was exposed to currency risk and the Romanian leu lost ground against major currencies in the analyzed period.

Nuclearelectrica, which operates the country’s sole nuclear power plant in Cernavoda, delivered 5.1 million megawatt-hours of electricity in the first six months, a decrease of 0.8% compared to the same period of 2014.

The company operates two 700 MW-reactors, which cover almost 20% of Romania’s power consumption.