Romania’s state owned electricity producer Hidroelectrica posted a record gross profit of EUR 115 million for the first half of this year, some 6 percent higher than in the same period of 2013, according to an official announcement.

The increase in profit came as the electricity market continued to decline. Hidroelectrica’s revenues were down almost 7 percent to EUR 339 million, due to lower electricity prices on the market.

However, the company managed to reduce its costs even more. The expenditure for external services were cut by 22 percent and the personnel costs were down 13 percent compared to the same period last year.

Interest costs were 60 percent lower, compared to the first six months of 2013, as the company paid back most of its bank loans. At the end of June 2014, the company’s outstanding loans were EUR 216 million, compared to EUR 841 million at the end of June 2012, when the company entered insolvency for the first time.

The company even managed to compensate for the extraordinary costs related to the tax on special construction, which had a negative impact of some EUR 34 million on the company’s results.

Hidroelectrica reentered insolvency at the beginning of this year and is managed by Euro Insol, a firm controlled by lawyer Remus Borza. The company could exit insolvency by the end of this year, at the earliest.

editor@romania-insider.com