CEZ 2014 EBITDA in Romania falls on green certificates suspension, lower prices

Czech energy group CEZ said on Tuesday its earnings before interest, taxes, depreciation and amortisation (EBITDA) from power production and trade in Romania dropped by 41% to 1.4 billion Czech crowns ($57 million/51 million euro) in 2014, while EBITDA from distribution and sales rose 28% to 2.3 billion crowns.

On the power production and trading segment, EBITDA fell by around 1 billion crowns, mainly due to the suspension of allocation of green certificates for the Fantanele-Cogealac wind park and lower market prices for green certificates, which generated a loss of 800 million crowns. Lower prices for electricity accounted for the remaining 200 million crowns, CEZ said in a report.

Energy distributors in Romania are required to purchase green certificates for every MWh of power they sell. The certificates are issued to wind, hydro and solar power producers who can sell them directly to distributors or trade them on the state-owned power market.

CEZ produced 1,256 GWh of electricity in Romania in 2014, flat on the year. The output of its 600 megawatt (MW) Fantanele-Cogealac wind park fell 7% on the year to 1,166 GWh due to unfavourable weather conditions. The Czech group also produced 90 GWh at its hydropower plants in the country.

In 2015, CEZ expects to raise power production in Romania by 9% due to more favourable weather for wind power production.

On the distribution and sales segment, EBITDA rose by about 500 million crowns mainly due to extraordinary income associated with the payment of debts by the Romanian postal service and state railways and lower costs of losses in the distribution system. On the other hand, EBITDA was hurt by additional costs due to a new tax on special buildings introduced at the beginning of 2014.

The company has been present in Romania since 2005.

(1 euro = 27.4849 Czech crowns)

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