Israel Electric Corporation (IEC) (TASE: ELEC.B22) finished 2015 with a NIS 223 million net profit, according to the company financial statements published yesterday. The profit is more than 50% less than in the preceding year, when its profit was NIS 456 million.
Company revenue totaled NIS 23 billion in 2015, 9% less than its NIS 28 billion in 2014. The company attributed its fall in revenue mainly to its rates, which fell 17.6% in 2015 in two stages, and to the entry of private electricity producers.
The new figures are a continuation of the existing trend in the company; IEC's revenue was down NIS 2.4 billion, an 8.7% decrease, in 2014. As revealed by "Globes" last January, IEC is predicting that its 2016 revenue will fall by an additional NIS 3.4 billion.
As of the end of December 2015, IEC was responsible for 77% of all electricity production in Israel, compared with an 84% market share in the preceding year. The company's loss of market share is a result of large customers switching to private power stations, such as those operated by Dalia Power Energies, Dorad Energy, and IC Power. IEC's 2016 work plan assumes that its market share will fall to 67%.
Electricity consumption in 2015 totaled 50.6 billion kilowatts-hour, compared with 49.9 billion kilowatt-hours in 2014, an increase of only 0.3%. This negligible increase trailed far behind IEC's expectations. Up until several years ago, IEC projected a 3.8% annual rise in demand for electricity, but the current report predicts an average annual rise of 1.9%-3%.
Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2016
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