Transelectrica is scheduled to post its 2Q09 results (unconsolidated, Romanian Accounting Standards) on 13 August 2009. We expect the firm to post a net profit of RON 10.7m for 2Q09, down 68.0% y/y and 77.4% q/q. No consensus is available at the moment. While the second and third quarters are traditionally weak at the firm, a 12% drop in consumption looks set to send the bottom line result close to nil in 2Q09. We expect a slightly negative market reaction to the results.
operating revenues are expected at RON 642.7m in 2Q09, down 7.9% q/q but up 12.2% y/y. Revenues on transmission services (i.e. the firm’s profit-generating activity) are likely to decline as a result of falling energy consumption (down almost 12% in 2Q09), which will not be fully compensated by the increase in tariffs (up 5.22% in the period). The year-on-year growth should be attributed to other non-profit generating activities such as balancing market services and system services, where tariffs have risen substantially (+39.6% y/y) in December.
Operating result is expected at RON 15.2m in 2Q09, down 57.5% y/y and 77.9% q/q. This should be due to a very weak quarter, with energy volumes down 12% y/y and 16.4% q/q and with no compensation from tariff hikes. Transelectrica’s costs are to a large extent fixed, which should lead to a very poor quarter. The firm probably delayed some maintenance expenses in 1Q09 and these expenses are likely to put additional pressure on the 2Q09 results.
Financial result is expected at a RON 2.5m loss in 2Q09, down 12.5% q/q but up 242.5% y/y. This should be the result of interest paid (EURIBOR linked debt) versus interest cashed in (BUBOR linked deposits). These factors are not influenced by €/RON movements (i.e. the main source of financial losses), as the revaluation of debt only takes place at the end of the year under Romanian Accounting Standards.