Over €140 million of investments for the 5-year period 2020 – 2024 are programmed by the Gas Distribution Company Thessaloniki – Thessalia (EDA THESS), as reported by the General Manager of the Company, Mr. Leonidas Bakouras in his interview to “N”. Main objective of the investment plan is the rate of the gas penetration to be increased by 19% compared to the levels as of today, as well as the distributed volumes of natural gas in the licensed areas of the Company.
According to Mr. Bakouras, the strong prospects combined with the legacy of the Company’s successful course, ensure the value creation of EDA THESS that reaches €400 million – based on objective criteria and internationally acceptable corporate practices of gas distribution companies.
The penetration rate of EDA THESS in the areas of its license exceeds 62% of the population. How did you succeed such performance?
“EDA THESS main goal was to bring natural gas to every citizen and business in Thessaloniki and Thessaly in the most competitive market prices. It was achieved thanks to our constant dedication in the development program, to big investments in the networks’ expansion, but also to the systematic investment in the human resources. A decisive role also played the effective and steady management, the cooperation in close with the institutions, authorities and municipalities that ensures the seamless network development. By this way we gained the consumers’ trust, which is the greatest profit. EDA THESS’ success lies in the satisfying at the same time both consumers and distribution users as well as shareholders and its staff”.
What is your opinion about the financial results of the last year?
“For the third consecutive years EDA THESS recorded strong financial results. 2019 ended with €41.5 million EBITDA, increased by 12% compared to 2018, while earnings reached €20 million, 15% higher than the previous year. At the same time, the Company’s turnover approaches €58 million, an increase of 9% compared to 2018. These results are the capstone of a very successful course for EDA THESS, that allowed her to distribute over €56 million dividends to its shareholders for the period of 2017- 2019”.
What are the Company’s future plans according to its investment plan?
“The Company is already implementing an ambitious development program, investing more than €140 million in the 5-year period 2020 – 2024. Upon its completion, gas penetration in the areas of its license will exceed 74% - by far the largest in Greece – and activated meters will surpass 450 thousand. The business plan includes, inter alia, the construction of 470 km of low and medium pressure network, the energy blockade lift of the remaining remote areas and their supply with CNG technology, but also the replacement of 59 thousand conventional meters with smart meters. With the implementation of its investment plan, EDA THESS will distribute more than 500 million cubic meters of natural gas in 2024, increase by 25% compared to 2019”.
The abovementioned outline the profile of a strong company for Gas Distribution Company Thessaloniki-Thessalia SA (EDA THESS) with its present and future being a result of strategy and programming. How do you assess the company’s value?
“There are objective criteria and specific methodology which is used to assess the value of an energy company such as EDA THESS in Europe and internationally. Beyond its financial results (revenue, EBITDA, profit), the value of its Regulated Asset Base (RAB) also plays an important role. Especially for EDA THESS, a series of factors are co-estimated as well, which prove its strength and great dynamic, such as the fact –for example – that it has 351,000 delivery points, against 470,000 in the entire Greece, very high network coverage and penetration indicators, high expertise, while its networks are the most modern and efficient.
Moreover, EDA THESS has the lowest distribution invoices in Greece and at the same time it can demonstrate a very effective business operation, which low operational cost and absolute respect to the law and regulatory framework, a fact that allows the company to fully guarantee the security of supply in the Licensed areas. At the same time, the solid foundations set for the development of the Company and the effective management guarantee the strong profitability by the end of its license, in 2043.
All the above ensure the creation of EDA THESS value, which on the basis of objective criteria and internationally accepted practice approaches €400 million. There is no doubt that the company’s shareholders (DEPA and ENI) feel very satisfied by the yield of their investment.
EDA THESS operates on private criteria since its establishment, with EGL (100% controlled by energy giant ENI) as investor, which steadily continued investing and supporting the Greek economy during the decade of the crisis. The company does not burden the state budget, but strengthens the State’s revenues, paying consistently high dividends over time. EDA THESS goes beyond the Greek reality and can be compared to the top distribution companies.”
There is a great interest in DEPA’s privatisation. What is your opinion?
“The big investment interest in DEPA Infrastructure constitutes a vote of confidence to our country’s growth perspectives. This happens because the capital investment in the sector of natural gas distribution suggests a long-lasting commitment that requires high initial investments, which pay off in the long-term.
Therefore, if the interested parts want to have a course equivalent to EDA THESS, besides the stable regulatory, legal and taxation framework, which is the state’s obligation to ensure, they will also need to have strong capital basis, high expertise and steady-effective management. They should be ready to proceed to big investments that pay off in the long-term.”
