Electric Company unveiled its financial statements for the first half: net profit of approximately NIS 0.74 billion

Electric Company unveiled its financial statements for the first half of 2023, revealing a net profit of approximately NIS 0.74 billion. This figure marked a decline from the prior year's corresponding period, which saw a profit of approximately NIS 0.86 billion.

A significant factor contributing to this shift was a 15.1% decrease in electricity generation during the first half of 2023 compared to the same period in the previous year. This decline was primarily attributed to the strategic move of transferring electricity production to private parties and the integration of green energy initiatives.

The company also reported a reduction in electricity production expenses for the same period. The expenses totaled around NIS 10 billion in 2023's first half, compared to approximately NIS 10.5 billion in the corresponding period last year. This cost reduction was primarily due to decreased fuel consumption costs.

An important development aligned with the government's energy policies was the transition from coal-based electricity production to natural gas. On August 9, 2023, a landmark event occurred with the initiation of natural gas firing in Unit 1 at the Rotenberg site. This transition is part of a larger policy effort to phase out coal production by 2025.

Further in line with governmental reform directives, the Electric Company took another significant step on August 11, 2023. The first ignition took place in the H-technology generator number 70 at the "Orot Rabin" site, as the company prepared to synchronize the unit with the electricity grid for subsequent testing and eventual commercial operation.

The financial report also highlighted a positive revenue trend for the first half of 2023, with total revenues amounting to approximately NIS 11.1 billion, reflecting a 4.7% increase over the prior year's corresponding period. This growth was mainly attributed to an increase in electricity tariffs during this time.

The report further noted a substantial reduction in fuel consumption costs. Expenses for fuel consumption in the first half of 2023 were approximately NIS 3.7 billion, showing a decrease of about 12.3% compared to the previous year's corresponding period. This reduction was linked to decreased coal electricity production and the discontinuation of liquefied gas usage.

Notable corporate activities also included the publication of a regulation by the Electricity Authority regarding the sale of the Eshkol power station during the first quarter of 2023. After a winning tender offer was withdrawn in July, a new competitive process was initiated, leading to an administrative petition submitted by one of the bidders in August. The company is actively reviewing the petition and will respond as required by legal procedures.

The company's focus on growth and improvement remains evident through its increased investments in various network segments. During the first half of 2023, the Electric Company invested around NIS 1.9 billion in these segments, a rise of about NIS 200 million from the previous year's corresponding period.

However, the financial statement also revealed an increase in net financial debt. As of June 30, 2023, the net financial debt stood at approximately NIS 37 billion, marking an increase of around NIS 2.3 billion compared to December 31, 2022. This rise was attributed to the company's significant expansion of investments in the electricity sector, which are being paid back over an extended timeframe through tariff adjustments.

The Electric Company's leadership expressed satisfaction with its performance during a period of industry transformation and challenges. Shlomo Arbiv, Chairman of the Finance Committee, extended gratitude to the CEO for navigating the company amidst turbulent times, while Meir Spiegler, CEO of the Electric Company, emphasized the company's financial strength as a cornerstone for consistent electricity supply and economic growth. Spiegler highlighted ongoing projects, including network upgrades, integration of renewable energy, electric vehicle charging infrastructure, and conversion to natural gas-based electricity production in line with government policies. The board's approval of the financial statements attested to the company's competence and achievements in the field.