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HEP ANNUAL REPORT 2010
PRESIDENT’S REPORT
6
PRESIDENT’S REPORT
LEO BEGOVIΔ
PRESIDENT OF MANAGEMENT BOARD
As announced in last year’s Report, the priority of the Management
Board in 2010 was to consolidate in general HEP’s financial position
while strengthening its financial discipline, and in relations
with third parties to strengthen transparency and trust of all HEP’s
stakeholders.
IN 2010 HEP GROUP made an operating income of 12.9 billion kuna with a net profit for the year of 1.44 billion
kuna, which is a significant profit growth compared to 2009 (154.4 million kuna). This growth was due to reduction
in electricity production costs and to the implementation of the measures in our business operations with which we
achieved savings and reduced manageable general costs and payroll costs.
The business operations in 2010 unfolded in the circumstances of the global recovery from the consequences
of the economic crisis and stagnation of economic activities in Croatia. The recovery of the world economy prompted
price growth of fuel and electricity but the prices never returned to the level they reached in the first half of 2008.
After energy demand in Croatia fell in 2009, there was a little growth in consumption in 2010. The very favorable
hydrological conditions with record water inflows allowed HEP to achieve record electricity production in its
hydro power plants and to reduce import and thermal power plant-generated electricity.
In 2010, the total electricity turnover was 19.8 TWh of which 15.8 TWh was produced in power plants owned
wholly or partly by HEP and the remaining 4 TWh was procured on the market. We met the needs for electricity in
Croatia in the amount of 17.9 TWh and sold 1.9 TWh on neighboring markets. Domestic consumption, after the 2009
fall, grew by 1.4 percent in 2010.
The year 2010 is significant for future operations of HEP as the main supplier of electricity in Croatia. During
the year other licensed suppliers outside HEP Group began their activities and a smaller number of customers left
HEP Opskrba, whereby the electricity market in Croatian actually began to really open.