S.N. Nuclearelectrica S.A. (SNN) Earnings Call Transcript & Summary

Hi, everyone. This is Valentina Dinu. So thank you very much for joining us today. We are going to deliver as usual of the presentation for the financial statements as at and for the year ended on December 31, 2022. I'm going to ask my colleague CFO of the company, Dan Niculaie to deliver the presentation and then you can -- we can go -- I head to questions and answers. So before that, please allow me to start recording, so we can use the audio file later on. Then the [indiscernible] thank you.

Hello everybody. I'm going to present the financial individual financial payments of 31st of December 2022. As you probably know, these are the financials which were approved yesterday by our shareholders, they do not materially -- they are not material different from the ones that -- from the interim or financial payments that we presented some time ago. So basically, it shows the financial performance of the company in a strong performance of the company in 2022. Without any more comments, I'm going to enter into the presentation of the main financial results. So as you see on the screen, the sales of the energy, electricity was in line with our budget with small variation. We're talking about 10.5 megawatts per hour million. In terms of terms of energy, our revenue of RON 6.3 billion, which was almost identical with our budget. Operating expenses, RON 3 billion, RON 2.9 billion EBITDA in line with the -- basically above our budgetary estimate. And because of this, our net profit is 22.9% higher than our rectified budget. On the next slide, you'll see a breakdown of why we ended up with this RON166.8 increase in our net result compared with the previous year. You see that the main driver for this exceptional performance was the increase in the sales of electricity. On the side, of course, on the minus side, you are aware that we had to pay in fall tax, which decreased significantly our profitability by increasing our expenses, of course. Other than that, we do not have significant changes. So I think we can move to the next slide. Okay. In terms of the balance sheet, you see that the noncurrent assets have increased, but not materially or have decreased with 1% compared to last year. In terms of total assets, of course, there is a significant increase, which is mainly driven by the increase in cash and cash equivalents in terms of monetary impact. In terms of long-term debts, you see that our long-term debt are decreasing. We are clearly closing our external debt only one of several small loans need to be repaid in 2024. Current liability, we have a higher current liability because it includes the solidarity contribution, the wind for tax for December, but which is currently paid in January. And the equity was increased as a result of the profit from the previous period. Now in terms of detailed presentation of the income statement. As mentioned in the previous slide, we have a very good year in terms of revenue with RON 6.3 billion relay. Operating expenses of $2.9 million, the largest expense being the contribution to the energy transition fund of RON 1 billion. With significant almost double EBITDA compared to 2021. Net profit, RON 2.6 billion, which is an increase by 157% compared to our year-end. It's an increase by RON 395 million compared to our -- sorry, it's leading. It's an increase with almost RON 500 million compared to our budget. Right, next one, please. Okay. Here, we have even further presentation of our financial highlights. It's a comparison between the final versus preliminary income statement. The difference is pretty small on its RON 35 million. As you can see in the right-hand side of our presentation, the difference comes from the transposition in our financial statement of an impact of a decision by court in relation with litigation with one of our yielding and we've been successful. So therefore, we need to reverse provision of RON 35 million. The other element, small impact, which does not affect the overall picture Okay. In terms of the elements which drove this financial performance, as you can see, there is on the presentation of why we needed to sell in 2022, more than 2021 and increased by 104.7%. Basically, our -- the driver was the increase in the way that we're selling price has no decrease in quantity of electricity sold as compared to 2021. In the competitive market, we have an increase of almost 110% in terms of price on the spot market, almost 147% in the balancing market significant increases by less than 10%. Now you see here in this presentation, the breakdown of our sales structure on the -- basically on the regulated market, the price, you see the curves, and you see that the quantities actually sold were over budget with the one that we budgeted. And that the spot market represents about 10.5% of the total sales value while the competitive market series almost 90% of the total volume of electricity. And the average price for the competitive market was in the region of RON 550. And the average price for the spot market was in the region of RON 1,205. Okay. In terms of the OpEx, on the screen, you see a very, very detailed analysis of what happened. As mentioned before, the largest impact was the we tax contribution to the energy transition fund, it was the name of this contribution varied last year because of the various changes in the methodology and a way to compute it. We have an increase in the depreciation and amortization because we've performed a revaluation of our new assets. Our personnel expenses increased because we hired more employees and always paid the higher salaries to the existing salaries. Cost of uranium fuel roughly the same, and direct contribution roughly the same in terms of non-notable variation, technological and nontechnological water and energy, basically, we follow the higher utility prices. Cost of credit electricity. Of course, we had to buy energy on the market and therefore, we encountered significant increase of the cost of credit electricity. Electricity transmission expenses, the tariffs have become more expensive. But therefore, we had to -- we had a significant increase in as compared to 2021. Of course, with [indiscernible] maintenance, we also have an increase, but it's not a much. So in terms of CapEx, in the next slide, we've managed to reinvest RON 561 million, which out of the company's account program of RON 699 million per day, which is -- we are happy with the level of investment. The target level of 60%, of course, has been exceeded. In terms of the speed of these investments you see here between ongoing given an investment made on live assets and equipment, the largest beta on ongoing investment, as you can see on the screen. The next slide, in terms of our -- the status of our large CapEx program. You see that we are in some refurbishment. We are seeing the second phase of the project. We are working with our electric contractor, mainly Candu Energy [indiscernible] on the project, and we were basically same pre-project engineering contracts. With respect to the multi unit for project development subsidiary and Network Nuclearelectrica. The main development here was the fact that we have successfully worked with our government to promote a law for the signing of a supportive between the Romanian state and Nuclearelectrica for the development of this project. This supports -- this law entails the support of the government financially winglet implementation of contract for different mechanisms, a stable dividend structure going forward and a lot of other administrative meters, which are extremely variable for the future. On the second large project, the development of our first formal reactor in [indiscernible], we are progressing with the first phase of the 9. We call it the FEED with double E with our selected partner the U.S. company, we call it FEED. And we are -- we think general names of understanding with potential clients. So we are progressing very well with this project. In terms of other KPIs, you know that performing carefully our level of value active emissions. You see the variation during the year, nothing to worry about. We're within our standard. The same with nuclear-fuel bond factor. It's important and we are very well within the limit. The capacity factor still is one of the best in the world at an accumulated 2022 Unit 1 to 90%, which we are very proud, continuing our excellence in delivering the energy. And in terms of next step in about term base, we hear each other again to present the first quarter report on 2023. It will be a good quarter. And then on 13th of August, we have the publication of our year report and later on in November, the quarterly report, the third quarter report of 2020. I think the presentation of its -- actually the presentation is if there are any questions.

Any questions, please? I don't think there are any questions, right? Well, if you have any questions, you can always send your questions by e-mail to us. We are going to answer it and every one of them. Meanwhile, if there are no questions, thank you for taking part in this conference call. Thank you to my colleague Dan Niculaie-Faranga for the presentation. As usual, I'm going to send you by to those of you who have confirmed both the presentation and the audio file. For everybody else, you can always find them on our website, Investor Relations page. So thank you very much. Have a great afternoon. Goodbye.

Thank you. Bye-bye.