“We’re ending the year (2015 i.e.) with a gross profit of about RON1.1 billion,” says Remus Borza, the lawyer who owns Euro Insol, the court-appointed trustee of insolvent Hidroelectrica.
Hidroelectrica ended 2014 with RON3.4 billion revenue, RON1.15 billion gross profit and RON941 million net profit. Its profit margin of about 28% turned it into one of the most profitable companies in Romania.
Hidroelectrica first went insolvent in mid 2012 and exited it a year later in the summer of 2013. It went insolvent again in February 2014, and has not recovered yet. The main factors that caused its problems were the bilateral contracts signed with several electricity traders, such as Energy Holding and Alpig, for less than the market price, as well as another almost 500 contracts with various service providers and equipment suppliers signed at higher prices that they should have been.
The company was able to preserve its profit in 2015 thanks to its cost control steps, one of the most important goals the management undertook to achieve. There was also an uptick in prices partly because of the about 4% rise in consumption, according to the data available for the first nine months of 2015.
(English version by Loredana Fratila-Cristescu)