S.N. Nuclearelectrica S.A. (53V.F) Earnings Call Transcript & Summary

Hello. My name is Valentina Dinu. I represent the IR team with Nuclearelectrica. And today, we are going to go ahead with the financial results for the first half of 2025. My colleague, Roxana Stamate, she's going to deliver the presentation for the first half of the year. Please feel free to interrupt or any time you may deem more information necessary. Anyways, after the presentation, we will continue with a short session of questions. Before that, I would like to announce you that this meeting is going to be recorded for the purpose of posting the audio file for all other investors. Okay. Thank you very much, Roxana, the floor is yours.

Thank you. Thank you, Valentina, and hello, everybody. I will deliver indeed the presentation for the individual and consolidated financial statements for the first 6 months of 2025. We will start by discussing about the financial results. For the 6 months of 2025, we have a net profit of RON 866 million, which is higher than the previous period -- comparative period of 6 months 2024 with 2.8% and above the budgeted value with 46%. We will go into details about these variations very soon. The net profit is based -- for this period is based on total revenues of RON 2.7 billion upon obtaining RON 2.6 billion on sales of electricity. As we produced 5 terawatts comparing -- compared to the previous period, which is similar. Unfortunately, we had an increase in windfall tax compared with 6 months 2024. This was driven by higher average selling price in the first semester above the capital price. And also, we have an increase of 14% in OpEx and also an increase in depreciation and amortization costs. Once again, the positive impact in the net profit was granted this semester by increasing sales of electricity, the increase is of RON 611 million. And also, we obtained the financial -- positive financial result of RON 60 million -- of RON 220 million, which is higher than the previous period with RON 60 million. This positive impact was compensated in a negative manner by the windfall tax of around RON 500 million. And also, we had an increase in cost of traded electricity of around RON 60 million. I would also like to present the EBITDA for the period, which is RON 1.1 billion -- almost RON 1.2 billion, which is a little bit below than the previous period and above the budgeted figure of RON 955 million. Because we also prepare consolidated financial statements, I would like to present the difference between the individual and the consolidated figures. As you know, we have three subsidiaries and also an associate. The subsidiaries are EnergoNuclear; the uranium processing factory from Feldioara; and also Nuclearelectrica Serv, which delivers some services for Nuclearelectrica. And also the associate is RoPower. And as you know, we net the individual financial statements with the intercompany transactions. So we mainly have in revenues, for example, not a significant impact, but also we have processing services invoiced by Feldioara, which are netted from the individual financial statements. We add the cost with the personnel of the subsidiaries and we eliminate the services provided by Nuclearelectrica Serv. In terms of financial costs, EnergoNuclear obtained some results, mainly ForEx exchange expenses and the interest revenues and foreign exchange revenues. At the level of profit, we recognize 50% of the result of the associated entity RoPower. And in terms of income tax, we have some income tax from Nuclearelectrica Serv and EnergoNuclear. The financial position of Nuclearelectrica is again very strong as you are used. We have as main variations of increase of 12% in non-current assets, around RON 1 billion, mainly due to the increase in net book value of tangible assets, and the increase in net financial assets valued at amortized cost or the loans provided to RoPower and EnergoNuclear. Also, the current assets has a variation of -- significant variation. But this time a decrease of 17%, which is also around RON 1 billion. We have a decrease in bank deposits, cash and cash equivalents of RON 842 million. As you know, we paid the dividends in this period. So, this is mainly the cash out that we see here. Also, we have some decrease in trade receivables and in the balance of other financial assets value at amortized cost, namely, we liquidated some certificates -- treasury certificates, and there is a reduction also in the VAT receivables. The non-current liabilities increased with RON 207 million or 52%. We withdrawn EUR 40 million from European investment bank for the CTRF project. This is one disbursement out of EUR 145 million loan contract. The current liabilities decreased with RON 300 million, mainly coming from the reduction in the balance of accounts payable. As we know, this balance is paid in the immediate period. As for the equity of the company, we only have the increase with the profit of the period -- the previous period, the profit that was not distributed and decrease from reversal revaluation reserve as we amortized the -- we depreciated the assets. The financial position comparison between individual and consolidated. In terms of non-current assets, we have a difference mainly represented by the cancellation of intragroup transactions such as the cancellation of loans granted by Nuclearelectrica to its subsidiaries and also an impact from the fixed assets of the subsidiaries. In terms of current assets, we mainly have the cash and cash equivalent of EnergoNuclear. The equity -- the consolidated equity is impacted by the retained earnings from the financial result of the subsidiaries. And the total liabilities is the total liability, which remains after eliminating the intragroup transactions. Now in terms of sales of electricity for the 6 months of 2025, we present you a bridge between the sales in the previous comparative period, 6 months of 2024 and current reporting period, 6 months of 2025. Electricity sales increased during these two periods, determined mainly by the increase in weighted average selling price with plus 23.5%. And in terms of quantity, we sold a little bit higher with 6.2%. We have no sales on the centralized acquisition market mechanism. And we will see that the entire quantity was translated or transposed to the competitive market, which increased in quantity sold and also in the -- weighted in the sales of Nuclearelectrica. We obtained for this period on average selling price of RON 516 lei per megawatt compared with RON 364.04 last year. This average selling price is obtained on the basis of spot market price of RON 550 lei and competitive market price of RON 518 lei. The weight of competitive market sales is 90%, and the net -- the weight of spot market sales is 10% in this period. In terms of OpEx, the 6 months OpEx for 2025 is of RON 1.9 billion, which is RON 658 million higher than the previous period and below the budget with 6.62%. The increase is mainly due to the windfall tax. For the comparative previous period, we had no windfall tax, because the price was below the capped price of RON 450 million, as we've seen the average price for the previous year was of RON 419.78 per megawatt, and this period is RON 516. So in the last year, in the first semester, we had no windfall tax, but this semester, we have RON 500 million windfall tax. The depreciation and amortization increased also because we put in function some assets. We also have an increase in other operating expenses. We have some legal and consulting services expenses that driven -- drove this increase. The cost of traded electricity decreased. We had a little bit of increasing quantity of purchased energy. In terms of cost of uranium, the expense increased with around 30%. We had an increase in the weighted average cost of fuel bundles, which comprises all cost components. The increase in operating expenses was compensated by lower personnel expenses and also some decrease or no variations actually in ANDR contribution and a significant increase in the contribution towards ANRE which is computed based on the sales of electricity recorded in the previous financial year. In terms of capital expenditure or CapEx we realized RON 1.3 billion -- almost RON 1.4 billion during the first semester, which is around 40% degree of completion. The budget -- the entire budget for CapEx for 2025 is of RON 3.4 billion, again, the degree of completion being 40%. Compared to the previous period, the completion degree was 26%, but the absolute value was significantly lower, around RON 350 million. I will go through some updates where is the case for major investments of the company. In terms of Unit 1 Refurbishment, on 14th of July, we have a government Decision #586, by which the environmental agreement was issued for this project, and also the expansion of the Spent Fuel Interim Storage or DICA, the expansion with MACSTOR 400 modules instead of MACSTOR 200 modules. And these two represent the fulfillment of the legal conditions for the environmental impact assessment and provides the necessary legal framework for continuing this project. In terms of Unit 3 and 4, the project of EnergoNuclear subsidiary, we are also in the stage of procurement for services for the development of engineering and nuclear safety and also technical consultancy services for Stage 2. The SMRs, we have an update on 26th June, NuScale Technology obtained an approval from the U.S. Nuclear Regulatory Commission, NRC, for the standard SMR NuScale VOYGR design with the same modular power that we know, 77 megawatts. And also the land transaction was completed based on the mandate obtained from the GMS of RoPower at the beginning of June 2025. The Board of Directors of SNN took note of this land transaction and the implementation by SNN of the measures related to the acquisition of the land ordered by SNN Board of Directors Decision #8 from May. In terms of CTRF for Tritium Removal Facility Project in May 2025, with CNCAN, so the regulator approval was obtained to begin the execution works. And on 2nd of June 2025, at the site of CTRF, the first concrete was poured. The Lutetium-177 product is currently also the conceptual design stage. We are envisioning that in 2027, the installation and commissioning of the radiation system will be done and also that in 2028, the large-scale commercial radiation service will be launched. Now I would like to present some technical performances. We have radioactive emissions below the annual limit. We have a technical performance in nuclear fuel burn up factor below the -- above, sorry, the minimum of the projects. We have a capacity factor of 84%, which is very good. But I would like to say that it was influenced by the planned outage of Unit 2 in May and June. And this is for today. This is -- these are all the information related to the reporting of first half of 2025. Thank you. If you have any questions, please.

Well, if there are no questions, thank you for taking part in this investors call. We will make sure to post on our website, Investor Relations page, the audio file of this meeting and also the presentation. Thank you very much, and have a good day.