DRAVA, KUPA, RJE»INA, LOKVARKA, LI»ANKA LIKA, DOBRA ...

In 2010, the total electricity turnover reached 19.8 TWh of which 15.8 TWh was produced by power plants
owned wholly or partly by the Group, and 4.0 TWh was procured in the regional market. For domestic customers’
needs and coverage of network losses, 17.9 TWh was ensured and 1.9 TWh was sold in the regional market. Domestic
electricity consumption increased in 2010 by 1.4 percent.
The availability of power plants, transmission and distribution network was very good, without any significant
disruption in the supply of electricity (other than in the Dubrovnik area at the beginning of the year), heat and gas.
The procurement of electricity and fuels was also reliable.
During 2010, other suppliers, outside HEP Group, became active in the electricity market taking over some
HEP Opskrba customers. Their market share is estimated to be up to 1 percent. Some business category customers,
mainly with lower consumption, did not exercise their right to choose a supplier and they continued to be supplied
by HEP Operator distribucijskog sustava. The share of eligible customers in the electricity sold in the domestic market
increased to 48 percent.
FINANCIAL RESULTS
BASIC INDICATORS
unit 2008 2009 2010 2010/2009
Electricity sales TWh 17.7 17.5 17.6 0.5%
Electricity production TWh 14.3 14.7 15.8 7.6%
Heat sales TWh 2.2 2.2 2.4 3.8%
Gas sales m3 mn 166 157 162 3.0%
Operating income HRK mn 11,889.4 12,600.8 12,968.6 2.9%
EBITDA HRK mn 1,922.9 2,255.1 3,831.1 70%
Group net profit HRK mn 31.1 154.4 1,435.4 830%
Total assets HRK mn 32,635.4 32,711.1 33,621.0 2.8%
Investments HRK mn 2,644.2 2,359.7 1,693.3 -28%
Number of employees 14,375 14,222 14,016 -1.4%
According to financial indicators HEP is one of the largest business groupings in Croatia. The business operations in
2010 unfolded in recession conditions and the main goal of consolidating the financial situation of the Group was
achieved.
The favourable hydrological conditions, despite growth in energy input prices contributed to the significant
decrease in variable production costs, and the implemented measures for efficiency improvement of business operations
resulted in decrease in the costs of salaries and other workers receipts as well as in manageable general
costs. This cost cutting together with increase in operating income, due to a slight growth in energy consumption,
increased operating profit to 2,210.9 million kuna (567.7 million kuna in 2009). Group net profit is 1,435.4 million
kuna of which 1,421.3 is attributable to equity holders of the parent.
CONSOLIDATED PROFIT AND LOSS ACCOUNT (ABRIDGED) (HRK mn)
2008 2009 09/08 2010 10/09
Operating income 11,889.4 12,600.8 6.0% 12,968.6 2.9%
Operating expenses 11,600.1 12,033.1 3.7% 10,757.7 -10.6%
Operating profit 289.3 567.7 96.2% 2,210.9 289%
Group net profit 31.1 154.4 396% 1,435.4 830%
Net profit attributable to equity holders of the parent 11.7 135.8 1,061% 1,421.3 947%
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HEP ANNUAL REPORT 2010 CHAPTER 3 - HEP’S BUSINESS OPERATIONS IN 2010