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03.08.2018 12:14
The National Electric Company registers a net loss in the first six months of 2018

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The National Electric Company reported a net loss for the first six months of the year amounting to BGN 74 million, according to the interim financial report of the company, published on the website of the Ministry of Finance. The situation for the first six months of last year was a bit more optimistic. The company then reported a loss before tax of BGN 954 thousand and ended with a net profit of BGN 1.5 million.

For the current six-month period, NEK reported operating loss of BGN 55 million and positive cash flows from operating activities of BGN 74.4 million. The uncovered loss from previous periods amounted to BGN 1.19 billion It is also clear from the report that the value of the current liabilities of the company exceeds the value of the current assets by BGN 674.7 million.
At the end of the first half of the year NEK's current liabilities to the sole owner of the Bulgarian Energy Holding (BEH) amounted to BGN 540.3 million, including overdue liabilities of nearly BGN 361 million.
"For the period ending 30 June 2018, the financial performance of the company is not in line with the requirements of creditor banks that have provided long-term loans to NEK EAD to maintain certain financial debt servicing ratios and the ratio of current assets to current liabilities due to its deteriorating financial performance and financial condition, "the report said.
It is also stated that the activity of the company is highly dependent on the support of BEH, as well as other sources of financing. "These circumstances indicate the existence of significant uncertainty that could cast significant doubt on the company's ability to continue as a going concern without the support of the sole owner and other sources of financing," the report said.
However, the management is of the opinion that, with the financial support of BEH, NEK will be able to continue its activities and repay its obligations without selling assets and without undertaking any significant changes in its activities.
The report also enters into detail regarding the the Belene NPP project. It is clear from the document that as of 30 June 2018, the cost of the project (included in the assets under construction) reached BGN 2.18 billion. Additionally, related to the project are properties, facilities and infrastructure with the amount of BGN 78.9 million.
"As of 30 June 2018, the company is not in a position to make a reliable estimate of the recoverable amount of project costs included in the value of property, plant and equipment under construction because of the specific nature and lack of clarity about the future realization of the project, which is not entirely under the control of the company's management, "the report said.
"On the basis of the above facts, the management of the company considers that as at 30 June 2018 there is considerable uncertainty about the future realization of the project and the recoverable value of the assets related to the Belene NPP construction project.

TAGS: NEC | NEK | national electricity company | loss | finances | Belene | NPP | Nuclear 

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20.03.2022  Teodor Bobochikov, Managing Partner, V-Ridium
Energy Transformation – Trends and drivers
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