CHISINAU (Moldova), May 12 (SeeNews) – The Moldovan unit of Spanish utility Gas Natural Fenosa sees its net profit rising to 335 million lei ($29 million/20.4 million euro) this year from 319 million lei earned in 2010, the unit’s president Silvia Radu said.
The unit, power distributor RED Union Fenosa, has earmarked at least 250 million lei for investments in 2011, flat on the year, Radu told SeeNews in an interview.
The company also expects turnover to rise to 3.3 billion lei this year from 3.0 billion lei in 2010, she added.
"The net profit this year will be a little bit higher but not above 340 million lei,'' Radu said.
"Regarding last year’s profit, the company decided to keep at least 70% of it in Moldova to finance this year's investments," she added.
Radu said that the bulk of the investments earmarked for 2011 will go towards the upgrade of its grid network, replacement of transformers and new management systems in a bid to improve the quality of services.
"We invest at least 17 to 30 million lei in the construction of new transmission lines annually," Radu said.
She added that the company expects to build tens of kilometers of new lines this year depending on the urbanisation plans proposed by local authorities.
"We plan to keep investments at the same level in the next five years, according to our business plan," Radu added.
The electricity supplied by RED Union Fenosa last year rose by 3.5% to 3.081 billion kilowatt hours.
Gas Natural Fenosa reported an 8.0 million euro ($11.3 million) EBITDA (earnings before interest, taxes, depreciation and amortisation) from Moldovan operations in the first quarter this year, according to data from the company’s website. Power sales in the country grew by 5.2% on the year, the company said but did not elaborate.
Spanish utility Union Fenosa bought three Moldovan power distributors in 2000 for $25.2 million. Gas Natural absorbed Union Fenosa in 2009 and the companies presented their new corporate brand, Gas Natural Fenosa, in April this year.
On Tuesday, RED Union Fenosa said it will also operate under the brand Gas Natural Fenosa following the rebranding process carried out by its parent company globally.
The three Moldovan power distributors owned by the Spanish utility merged in 2008 and now operate as one legal entity.
Earlier this month, the Moldovan Economy Ministry said it plans to privatise the remaining two state-owned power distributors, RED-Nord and RED-Nord-Vest, as well as other companies in the country’s energy sector.
"When the Moldovan government will make it clear what would be the conditions for the privatisation of companies in the energy sector, our company will make a decision. But for the moment there is no clarity on this matter," Radu said.
She also said RED Union Fenosa has no plans to start exports of liquefied natural gas (LNG) to Moldova as the country has no infrastructure for re-gasification of LNG.
(1 euro=16.4173 Moldovan lei)