GuruFocus -
- Net Profit Reduction: 35% decrease, amounting to 692 million RON.
- Revenue from Energy Sales: Decrease of 40.9%, totaling 2,270 million RON.
- Electricity Cost Increase: 218 million RON due to higher costs in the balancing market.
- Personnel Cost Increase: 40 million RON due to higher salaries and employee incentives.
- Interest Revenue Decrease: 75 million RON reduction in net financial result.
- Income Tax Decrease: 117 million RON due to reduced profitability.
- OpEx Reduction (excluding windfall tax): 7.1% decrease, totaling 112 million RON.
- EBITDA Increase: 6.7% increase, amounting to 114 million RON.
- Net Profit Increase (compared to budget): 11% increase, totaling 128 million RON.
- Windfall Tax Decrease: From 2 billion RON to 110 million RON compared to 2023.
- Cost of Uranium Increase: 17% rise.
- Repairs and Maintenance Increase: 33% increase due to plant outages and maintenance needs.
- CapEx Expenditure: 41.7% completion, with 547 million RON spent out of a 1.3 billion RON budget.
- Electricity Sales Revenue (9 months 2024): 40.7% lower compared to 2023.
- Sport Market Revenue Increase: 57.1% increase, with a 106.3% rise in quantity sold.
- Balancing Market Revenue Increase: 690% increase, with a 78.6% rise in quantity and 342.8% increase in average price.
- Capacity Factor (September 2024): 86.18% accumulated capacity.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Societatea Nationala Nuclearelectrica SA secured new loans amounting to 188 million RON for the financing of the small modular reactor project, indicating progress in their strategic initiatives.
- The company reported a significant reduction in windfall tax liabilities, decreasing from 2 billion RON to 110 million RON compared to 2023, positively impacting net profit.
- There was a 6.7% increase in EBITDA, amounting to 114 million RON, reflecting improved operational efficiency.
- The company has successfully completed the second phase of the unit refurbishment project, with a long-term framework agreement valued at EUR 240 million, marking a significant milestone.
- Societatea Nationala Nuclearelectrica SA has achieved 100% internal production of nuclear fuel bundles, reducing dependency on external suppliers and enhancing supply chain security.
- The company experienced a 35% reduction in net profit over the first nine months of 2024, primarily due to a 40.9% decrease in revenues from energy sales.
- There was a notable increase in electricity costs due to higher costs in the balancing market, resulting from plant outages, impacting financial performance.
- Personnel costs increased by 40 million RON due to higher salaries and employee incentives, adding pressure to operating expenses.
- The cost of uranium increased by almost 17%, and repairs and maintenance costs rose by 33%, contributing to higher operational costs.
- The company faced challenges in the sales mix due to regulatory changes, leading to a temporary shift towards short-term market sales, which affected revenue stability.
A: It's too early to speculate on the impact of the court's decision. If there is an impact, it will likely be beneficial, but we need to see how the regulatory enforcement unfolds. Regarding the sales mix, changes were influenced by regulatory adjustments in December 2023, which required 80% of production for centralized sales. However, in March 2024, the market conditions led us to shift towards short-term markets due to the absence of expected volumes in the centralized market.
Q: Are you still using the Canadian company as a supplier for nuclear fuel, and when will you be able to produce your own bundles?
A: We produce 100% of our bundles internally within our group. We only import raw uranium, which is processed into uranium dioxide in Romania. We are not reliant on the Canadian company for bundles anymore.
Q: Are you seeing higher prices in the market, and do you expect this trend to continue?
A: We are observing some price increases in the market, but it's too early to predict whether this trend will persist. The market is competitive and open, with imports and exports influencing prices.
Q: Can you provide more details on the impact of the regulatory changes on your sales strategy?
A: The regulatory changes in December 2023 required us to allocate 80% of production to centralized sales, split equally between annual and monthly deals. However, in March 2024, the market conditions led to a shift towards short-term markets due to the lack of demand in the centralized market. This had a significant impact in Q2, but we are moving back to longer-term contracts in Q4.
Q: Are you still linked to a single supplier for uranium, or do you have multiple suppliers now?
A: We are not linked to a single supplier anymore. Uranium is a commodity, and we have multiple suppliers, providing us with options in terms of price, safety, and availability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.