The HEP power supplier earned net profits in the amount of HRK 1.2 billion in the first half of 2016, which is HRK 276 million more than in the same period last year, and its investments grew by 73% to HRK 174.7 million, shows a financial statement released by that state-owned company.
The profit increase is owing to higher financial revenues and lower operating expenses.
HEP's operating revenues in H1 were HRK 4.09 billion, a drop of 1.9%. Due to unusually high winter temperatures, gas sales on the wholesale market were lower, resulting in a drop in gas sales revenues of HRK 171.2 million. The lower revenues were also due to a government decision to lower the sales price of natural gas.
Revenues from the sale of electricity went up HRK 276 million, owing to better sales on foreign markets.
Operating expenses were HRK 3.3 billion, down HRK 272.7 million or 7.5%.
The drop in operating expenses was due to lower costs of fees related to electricity production resulting from lower production in HEP Group's power plants. The cost of gas purchases for the wholesale market went down by HRK 103.2 million, due to lower sales and a lower purchase price of gas, resulting from a government decision.
Financial activities earned the company a net profit of HRK 617.9 million. Financial revenues were HRK 834.2 million. Financial expenses were HRK 216.3 million.
Investments in H1 totalled HRK 174.7 million and were related to the construction of power facilities and biomass-fuelled co-generation plants and the purchase and construction of IT infrastructure.
HEP Group in H1 earned a consolidated net profit of HRK 1.34 billion, about the same as in H1 2015.
The group's operating revenues amounted to HRK 7.17 billion, up 0.5%. Operating expenses totalled 5.4 billion, down 3.7%.
The group's debt on June 30 amounted to 5.4 billion kuna, down 4.1% from the start of the year. Investments in H1 totalled HRK 806.2 million.