Press conference

2011 was an extremely successful year for the GEN-I Group; subsidiaries play an ever increasing role in the Group’s operations; trading on Turkish borders; successful sales to end-customers; public contract won for electricity deliveries to the City of Zagreb until 2015; more than 40 thousand customers choose Poceni elektrika (Affordable Electricity).

Ljubljana, 16 February 2012; At today’s press conference the president of GEN-I’s management board Robert Golob and the manager of GEN energija Martin Novšak presented the performance of the GEN-I Group and some of the main challenges it faced in 2011 to the assembled members of the press.

“We have had a successful year. Despite some unexpected challenges we managed to ensure the stability and reliability of electricity supply and production. We moved the company’s headquarters to the GEN Information Center where, in addition to upgrading the energy education center and the GEN-I call center, we upgraded and modernized the existing control center, as this was of the utmost importance for the entire GEN-I Group,” said the manager of GEN energija, d.o.o. Martin Novšak. The president of GEN-I’s management board Robert Golob reflected on 2011: “The more turbulent the markets became, for instance as a result of Germany’s change of policy on nuclear energy or the dry summer and the resulting low water levels, the better the GEN-I Group performed. Why? The answer lies in the international trading infrastructure we established on 17 markets and the system we have in place for purchasing cross-border transfer capacities on 26 borders, as well as the extremely quick responsiveness of the GEN-I Group. We are therefore able to discover and seize opportunities that arise on electricity markets from the Czech Republic to Turkey.”

All this contributed to a very good performance of the GEN-I Group, and this despite growing competition, deteriorating payment discipline and a declining trend in electricity consumption by end-customers in the business segment, which first occurred in fall 2011. In the 2011 business year, the GEN Group far exceeded its targets, with operating revenues reaching EUR 1,012 million, up 55% on 2012, sales volumes on all markets totaling just over 17.1 TWh of electricity (up 25% on 2010 when sales reached 12.8 TWh), and net profit reaching EUR 14 million, up almost 90% on the previous year when the Group recorded net profits of EUR 7.4 million.

With the help of its partners the GEN-I Group started trading electricity on Turkish borders in 2011, and recorded growing market shares in the sale to end-customers in the business segment in Slovenia and Croatia, while it maintained its market shares in Italy and Austria. Robert Golob describes the Group’s most important achievement in the end-customer segment on foreign markets: “One of our most prized achievements – although not entirely unexpected since we focused our efforts on this market – was the contract we won at a public tender organized by the City of Zagreb (as the first foreign supplier to end-customers in Croatia), securing a deal worth EUR 24 million in total for the supply of 390 GWh of electricity until 2015.

Martin Novšak, manager of GEN energija, d.o.o., emphasized the strong partnership and collaboration between GEN-I and GEN energija, which holds a 50% stake in GEN-I: “GEN-I, d.o.o. recorded sales of 17.1 TWh of electricity in 2011, of which 2.3 TWh were purchased from the GEN balance group.” The common goal of all companies operating within the GEN Group, led by Martin Novšak for the past seven years, is to ensure the safe and reliable production and supply of electricity. The GEN Group covers around 30% of electricity needs in the Slovenian electricity system. The synergies which result from the use of various energy sources in production (nuclear, hydro, thermal, solar and in future also wind power) and which are harnessed by Group members, are a crucial factor in the reliability of energy supply.

Sales to end-customers and Affordable Electricity
The GEN-I Group has at its disposal the infrastructure necessary to sell electricity to end-customers on the Italian, Austrian and Croatian markets. The only market on which the Group engages in mass electricity sales to households is Slovenia. “In mid-2011 when Slovenian households saw the first electricity price rises, we joined forces with the Slovenian Consumers’ Association and gave a public promise to our customers that we would not increase our prices until 30 June 2012. From the commercial point of view, this was not a difficult decision since electricity prices on the wholesale market had not gone up, and this was only a small segment of our overall operations, in which our main goal was to remain the most affordable electricity supplier, explained Robert Golob. Martin Novšak added that increasing sales to household customers is very much in the interest of the GEN Group, which by providing its own sustainable and stable energy sources greatly contributes to the lowering of our import dependency and to increased economic growth. “We are extremely proud of the fact that our Poceni elektrika (Affordable electricity) brand and its team have received the 'Customer Friendly Supplier' award for the third consecutive time,” added Martin Novšak.

As of 1 February 2012, Poceni elektrika (Affordable Electricity) was supplied to more than 40,000 households and small business customers. The annual volumes of electricity delivered to households totaled 205 GWh, which is equivalent to a 6.4% share of the Slovenian household market. Between the end of 2010 and the end of 2011, sales went up by an impressive 120%.

Views on market position and performance of the GEN-I Group
“In the years before the economic crisis, we built a strong business network, established stable business processes and developed our own analytic platform. During the first years of the crisis, we intensified our investments in all of these areas. We are not dwelling on when the crisis will be over. Instead, we are increasing our market shares, expanding our operations by carefully planning our growth and avoiding excessive risks. The only way to remain confident in times of crisis is to be in better shape than the competition. A Slovenian magazine once described the way our national budget was being managed with the phrase: ‘We sliced it generously, now we’ll have to tighten our belts’. Despite its youth, the GEN-I Group is fairly conservative in its management approach, and prefers more prudent steps to overly confident ones. Over the past six years, we have risen to the top three international trading companies in the wider region. And we intend to stay at the top. We wish to continue providing jobs for experts, engaging in trading activities in the wider region and supplying affordable electricity to Slovenian households. We also wish to keep raising quality standards in the supply of electricity to end-customers. I believe we have chosen the right way of doing our bit to help the Slovenian economy and the state fight the current global economic crisis," said the president of the management board Robert Golob on the market position of the GEN-I Group.
“The Group generates more than 80% of its income from trading. In the past year, we have worked with over 150 strategic business partners on 17 markets and we have recorded significant market share growth, particularly on less liquid Southeast European markets. We have also reinforced our position as a reliable, responsible and well-established electricity trading company in the wider geographical region,” said Martin Novšak on the Group’s international activities in 2011. Operations were heavily affected by the sudden price rises in March, which resulted from a change in Germany’s nuclear policy and the summer drought that caused low water levels and subsequently reduced electricity production. The year 2011 was also characterized by the widening gap between electricity prices in Western Europe and prices on Southeast European markets. This gap was one of the opportunities seized by the GEN-I Group, as its international trading activities are based among other things on the strong coverage of markets with cross-border transfer capacities. “This enables us to take advantage of situations on the different markets and also to spread our risks,” concluded the manager of GEN energija Martin Novšak.

 

 

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