Public Power Corporation spins into freefall
Public Power Corporation’s losses are growing at a mind-boggling pace, reflecting the deep structural problems of the utility and the outcome of government decisions concerning the electricity market.
The 2018 financial results that PPC issued on Tuesday revealed that losses soared from 183.8 million euros in the first half and 299.5 million euros by end-September 2018 to 542 million euros by the end of the year. This compares with profits of 127.6 million euros in 2017.
Crucially, if one adds the supplementary activity of the company’s production capacity, which includes the plants of Meliti and Megalopoli that are up for sale, the total losses for 2018 reach 903.7 million euros, against profits of 237 million euros the year before.
Operating profits posted a 44.55 percent decline from 456 million euros in 2017 to 260.1 million in 2018. Turnover shrank by 4.1 percent or 201.8 million euros as a result of the reduction of PPC’s market share from 86.7 percent in 2017 to 81.9 percent last year.
The PPC results came like an electric shock to the local market and triggered another clash between the government and the opposition, while also leading the utility’s stock to plunge 11.75 percent. “We fear that if PPC explodes it will destroy the entire universe,” said one energy market source, with another adding that “this is a bomb that not only concerns the electricity market but the whole economy.”
New Democracy energy spokesman Costas Skrekas spoke of “shock and awe,” placing the blame squarely on Prime Minister Alexis Tsipras, Energy Minister Giorgos Stathakis and PPC head Manolis Panagiotakis for, as he claimed, turning the utility into a “zombie company.”
Panagiotakis attributed this historic high in PPC losses to the 137.9-million-euro increase in the price of carbon emissions and the 151.6-million-euro increase in the cost from the power auctions in 2018 compared with the year before. To reverse the situation, Panagiotakis pledged to introduce measures included in a business plan that has been frozen for a year.
