Bulgaria’s Major State-Owned Energy Companies' Debts Rise In Q1
The liabilities, mostly intra-group loans, of the major Bulgarian state-owned energy companies, increased in the first quarter of 2014, placing the sector under increased pressure, the companies' quarterly financial reports indicated.
The consolidated current liabilities of the Bulgarian Energy Holding (BEH), which incorporates the assets of the country's biggest state-owned energy companies, exceeded 119 million levs ($84.7 million/60.8 million euro) at the end of the first quarter of 2014, an increase of 10.4% from the end of 2013, according to BEH’s latest financial report published on the finance ministry's website. Non-current liabilities stayed flattish at some 972 million levs at the end of March.
BEH incorporates assets of the Kozloduy nuclear power plant, gas monopoly Bulgargaz, gas transmission system operator Bulgartransgaz, telecommunications operator Bulgartel, the National Electricity Company (NEK) and its wholly-owned system operator, the Electricity System Operator (ESO), coal-fired power plant Maritsa East 2 and the Maritsa East coal mines.
During the first quarter of the year BEH bought some 120 million levs in debt owned by the Sofia heating utility to gas supplier Bulgargaz, and provided over 1.0 million levs in loans to its subsidiaries, its financial report indicated.
In order to improve the impaired liquidity of its subsidiary NEK and balance the financial burden resulting from its outstanding debts, BEH has drafted an agreement on the consolidation of its subsidiary's debts into a single loan with a maturity of 10 years. The agreement is pending approval by the energy regulator, BEH added.
The current liabilities of another BEH unit, ESO, jumped 45% to 166.2 million levs by end-March while its non-current liabilities more than quadrupled from the end of 2013, to nearly 49 million levs.
Bulgaria's sole nuclear power plant Kozloduy reported a slight drop in total liabilities at the end of March compared to the end of 2013, as current liabilities went down by 19% to 174 million levs and non-current liabilities stayed flattish at 518 million levs.
For most of the big state-owned energy companies the increased indebtedness is accompanied by a drop in revenues. This, in turn, makes it harder for them to repay their outstanding debts, as well as to invest in maintenance and upgrade works.
BEH’s non-financial revenues dropped nearly 94% on the year to 309,000 levs in January-March. BEH attributed the decrease to a drop by nearly 85% in payments from its subsidiaries for provided services.
NPP Kozloduy’s revenues totaled 224.2 million levs in the first quarter, a decrease by 0.17% compared to the same period a year earlier, whereas ESO reported a 23% annual drop in its sales revenue in the three months through March.