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

OPERATING EXPENSES
The Group’s operating expenses in 2010 decreased by 1,275.4 million kuna to 10,757.7 million kuna. The decreased
operating expenses are due to the implemented measures for reduction in staff costs and manageable general
cost. The costs of production and purchase of electricity significantly decreased due to the impact of the following
factors:
- favorable hydrology which made possible for hydro power plants to generate 8.3 TWh of electricity
- lower costs of electricity procured on the market by 31 percent,
- lower procurement of electricity by 17 percent,
- lower electricity production by oil-fired power plants due to which total electricity production by thermal
power plants was lower by 8 percent.
Staff costs are determined in the Collective Agreement which links growth in salaries to the growth in Croatia’s gross
domestic product in the previous year. In 2010, annexes to the Collective Agreement were signed which reduce or
modify some rights which, in addition to reduction in the number of employees, contributed to decrease in staff
costs by 62 million kuna.
Other operating expenses increased by 6 percent, most of which is cost increase due to making of provisions for
doubtful payment collection, for legal suits, unused annual vacations, severance payments in accordance with the
Collective Agreement, costs of investment and damage in connection with contracts. The continuous measures
reduced manageable costs within the group of general operating expenses by 49 million kuna.
OPERATING EXPENSES (HRK million)
19%
19%
18%
16%
28%
2,011.5
2,077.1
1,895.2
1,721.5
3,052.4
ELECTRICITY PROCUREMENT
FUEL
STAFF COSTS
DEPRECIATION
OTHER OPERATING EXPENSES
10,757.7
-10.6%
33
HEP ANNUAL REPORT 2010
CHAPTER 3 - HEP’S BUSINESS OPERATIONS IN 2010