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© Compania Nationala de Transport al Energiei Electrice Transelectrica SA |
The power grid operator, Transelectrica (TEL), released its 2Q 2007 un-consolidated financial results under Romanian accounting standards (RAS), which came in below our estimates. A comparison with 2Q 2006 is not relevant due to the fact that starting 2007 Transelectrica applies a new methodology with respect to pass-through revenues. For that reason, we provide a comparison with 1Q 2007.
Company’s turnover stood at RON 480 mn, 15% down qoq and 12% below our estimates. As explained by the management, top line has been negatively influenced by several factors, including lower electricity consumption due to mild weather and lower market balancing revenues as market participants were more accurate in planning their needs.
On the cost side, Transelectrica reported 29% higher (qoq) employees related expenses, while third party expenses went up by a hefty 58% qoq, mainly due to repairs and maintenance services provided by subcontractors.
EBIT (under RAS) plunged 64% qoq to RON 20 mn against our estimates of RON 50 mn. Accordingly, net profit came in at RON 12 mn, 71% down qoq and 57% below our estimates.
| in RON mn (RAS, un-consolidated) | 2Q 07 | 2Q 07e RCI | 1Q 07 | qoq |
| Net revenues | 480,0 | 545,0 | 562,0 | -15% |
| EBITDA | 71,0 | 90,0 | 104,0 | -32% |
| EBIT | 20,0 | 50,0 | 60,0 | -67% |
| Net profit | 12,0 | 27,6 | 42,4 | -72% |
Source: company data, RCI research
We maintain our Hold recommendation with a 12-month price target of RON 44.5 per share.
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Copyright: 2007 Raiffeisen Capital & Investment SA. All rights reserved. For further Information please contact Raiffeisen Capital & Investment SA, 15, Charles de Gaulle Square, 4th Floor, Bucharest 011857, Romania, Authorized by CNVM decision 3083/09.09.2003
Tel. +40 21 306 12 33, fax: +40 21 230 06 84, e-mail: office.rci@rzb.ro, web site: http://www.rciro.ro
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