Annual report - HSE

2.11 Business performance analysis
In 2012, the HSE Group realised net sales revenue in the amount of EUR 1,807,655,487
and exceeded the revenue realised in the same period of the previous year by 36% due to
larger sales quantities of controlling companies, particularly in the foreign market.
The realised operating profit or loss of the Group in 2012 amounts to EUR 113,297,265 and
exceeds the profit or loss from 2011 by 18%. In 2012, the HSE Group created a net profit in
the amount of EUR 85,980,549, which is 23% more than in the previous year. The net profit
increase was mostly a result of higher other operating revenue (on the basis of provision
reversals, drawing of deferred revenue and winning of the case TDR-Metalurgija at the
Supreme Court), as well as of lower income tax due to changed tax legislation.
Assets of the HSE Group as at 31 December 2012 amount to EUR 2,595,852,738 and
increased by 14% compared to the end of 2011, particularly due to larger investments of
the Group.
As at 31 December 2012, the HSE Group equity amounted to EUR 1,473,462,757, which is
5% more than at the end of 2011, mostly because of the net profit in 2012.
In the discussed period, the HSE Group companies produced 7,839 GWh. Production
increased by 3%, mostly due to larger production of HPPs (better hydrologic conditions in
the second half of the year) and the trial run of HPP Krško.
In 2012, the Group realised positive cash flow from operating and financing activities,
which is of key importance; however, a negative cash flow arose from financing of large
HSE Group’s investments, particularly the investment in replacement Unit 6 at TEŠ. As at 31
December 2012, cash was by EUR 60 million lower, compared with the end of 2011. Due to
non-realised drawing of long-term loans from EIB and EBRD, the Group carried out bridge
financing of Unit 6 through short-term borrowing from banks and own funds.
Structure of the statement of financial position
of the HSE Group and the controlling company
as at 31 December 2012
HSE GROUP
CONTROLLING COMPANY
assets
liabilities
12% 88% assets 34%
66%
26% 74% liabilities 29%
71%
Short-term Long-term Short-term Long-term
Statement of financial position structure
On the basis of the statement of financial position of the HSE Group, it is evident that as
at 31 December 2012 the HSE Group provides short-term financing sources for a part of
long-term assets. The reason for this is delayed drawing of the EIB and EBRD long-term
loans for replacement Unit 6 in 2012 that made the Group use bridge loans from banks
and own resources.
Capital adequacy
Ensuring capital adequacy is one the most important responsibilities of HSE Group
managers. As at 31 December 2012, the Group recorded insufficient long-term resources
for financing long-term assets, due to short-term bridge financing of the TEŠ Unit 6. After
the drawing of the EIB and EBRD loans began in March 2013, the Group capital adequacy
normalised, and it has been estimated that the Group possesses adequate resources in
relation to maturity of assets. Considering the debt and predictions regarding events on
electricity markets, ensuring of capital adequacy remains one of key duties of the HSE
Group’s managements.
Annual Report HSE 2012
2 Business Report
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