Financial and business news from Bulgaria

Heating in Sofia is rising in price, the “Toplofikatsiya” said with how much

With just six levs more expensive it will be a megawatt hour warm in four years. This predicts the metropolitan “Toplofikation”, reported in Monitor.
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In 2020 the thermal energy of the company has an average price of 77.35 leva per megawatt hour and reaches 78.98 leva per megawatt hour. In 2024 the expected price is 83.72 leva per megawatt hour.

This provides for an updated business plan of the company, which is being considered by the Energy and Water Regulatory Commission (EWRC) in connection with an extension of operating licences for another 25 years.

The forecast is made on the basis of annual inflation of 2%, and the expectations are that incomes in Sofia will grow at a faster rate and this determines the social tolerability of the cost of heat energy. The long-term liabilities of Toplofikatsiya Sofia will increase and from 805 million leva this year will reach almost BGN 1.2 billion in 2024.

In the document, which takes into account the effect of reimbursement at the new gas prices, which entered into force with an old date, the municipal company predicts that in 2020 they will work at a loss of BGN 56 million.

However, the financial situation improves compared to 2019, when a loss of BGN 82.6 million was reported, and in 2021 a positive financial result before taxes of BGN 8.08 million is even expected.

Over the next three years the company hopes to work at a profit of BGN 18.5 million, BGN 30.7 million and BGN 31.9 million respectively.

Revenues from the sold heat energy will grow smoothly from BGN 282 million in 2020 to BGN 310 million in the next five years. However, significant will be the growth of revenues from the sold electricity - from BGN 119 million in 2020 to BGN 306 million in 2024. The reason for the expected increase is the company's plans to build new cogeneration capacities.

Total revenues increase from BGN 423 million to BGN 651 million. The fuel costs are a major share in the total costs of the company and will grow from BGN 222.9 million in 2020 to BGN 232 million in 2024. The inclusion of the waste processing plant is also reported here, which will reduce the consumption of natural gas.

For the modernization of the network, BGN 80.3 million are envisaged over the next five years. For the whole period of the business plan, the investment expenditures amount to BGN 831 million, secured by own funds, investment loans and grants granted under Kozloduy International Fund and under OP “Environment 2014-2020.

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