THE Public Power Corporation (PPC), Greece’s main electricity utility, recorded heavy losses last year and its own auditor warned about the firm’s sustainability. Experts say painful decisions may be required, including rate hikes and asset sales.
PPC recorded after tax losses of 542 million euros, according to the 2018 financial results released this week.
When the assets it has conceded or is about to concede, such as four of its coal-fired plants, are added to the group data, the losses climb to 903.7 million euros. These are the biggest losses the firm has recorded in its almost seven-decade-long history.
PPC’s certified auditor, Ernst & Young (EY) even warns that the high losses and the reduced revenues generate concerns over the survival of the utility.
In the annual financial report of PPC, EY argues that “based on the estimates of the management, the conditions that are expected to continue in the next 12 months suggest the existence of substantial uncertainty that could raise significant uncertainty about the capacity of the company and the group to sustain their operation.”
PPC chief executive officer Manolis Panagiotakis attributed the high losses to the increased charges for carbon dioxide emissions and to the high costs from electricity auctions.
As the company is forced by the country’s creditors to divest from power production and open up the market to alternative producers and suppliers, its turnover shrank by 4.1 percent last year from 2017.
All this is set to probably lead to electricity rate hikes for consumers, in a period just before the general election this fall. Panagiotakis conceded that “PPC has exhausted all options for not rolling over the consequences to consumers.”