Business results in 2010
The Assembly and Supervisory Board of Plinacro have adopted the Annual report of the Plinacro Group for 2010. This year, as stated in the report, will be remembered as the year in which largest investments were carried out, from the beginning of implementation of development phases of the construction and modernisation of the Croatian gas transmission system. In 2010 Plinacro Group invested HRK 1.436 billion, out of which 1.431 billion in gas transmission sector and u 4.7 million in natural gas storage sector. Investment activities of Plinacro Group in 2010 resulted in constructing approximately 300 km of new pipelines. This placed Croatia among the most developed countries in Europe from natural gas availability aspect. Along with the realised plan of investment in the 2nd and 3rd part of the gas transmission system of Lika and Dalmatia, two gas pipelines in Slavonia were constructed: Slobodnica–Donji Miholjac gas pipeline and Dravaszerdahely–Donji Miholjac international gas pipeline, the interconnection between the Croatian and Hungarian gas transmission system which provided a new direction of natural gas supply.
The income of the Group in both sectors is regulated by tariff system for natural gas transmission and storage which hasn’t been modified since 2009. Despite the recorded decline of economic activities, in 2010 Plinacro group had total income in the amount of HRK 765.55 million. Total expenses amounted to HRK 598.87 million, gross profit was HRK 166.67 million, while net profit was HRK 133.86 million. Over the same period the total assets of the Group increased by HRK 801 million.
Although business conditions in 2010 were extremely difficult, and in spite of all measures of rationalisation and saving undertaken within the Group, as well as significantly increased scope of business in all sectors of the organisation, the set goals have been carried out without the increase in the number of employees. The expertise, professionalism and full responsibility of employees enabled Plinacro Group to achieve good business results, expected in the future as well.
By continuous activities in the areas of promoting ethical principles in business as regards human rights, labour law, environmental protection, optimization of natural resources and people, promotion of social awareness and anti-corruption activities, Plinacro group tends to define itself in society as a recognisable promoter of sustainable development and socially responsible business.
In the future period business conditions are not likely to improve, particularly since the valid tariff items (determined in 2009) for natural gas transmission will be applied until further notice. Therefore, the activities of the Group are going to be oriented towards further implementation of measures of saving and rationalisation of all sectors, providing liquidity and orderly performance of all outstanding liabilities and the continuation of investment projects in compliance with adopted plans. Further development plans of Plinacro Group are primarily oriented to the construction of interconnecting and transit gas pipelines, which would at the same time increase the utilization of the capacity of the basic national gas transmission system, and to the construction project of storage for balancing gas supply system in peak consumption conditions (Grubišno Polje), for which the preparatory activities have started in the current year.
The audit of business activities in 2010 confirmed that consolidated financial reports in all material aspects provide true and fair view of the financial status of the Group as at 31 December 2010 as well as business results, changes of capital and cash flows of the Group for 2010 in compliance with the Accounting Act and International financial reporting standards in force in the Republic of Croatia.
Plinacro group is an energy je entity within a regulated sector. The Group is active as of 1 May 2009, and consists of Plinacro Ltd as the mother company, and Podzemno skladište plina Ltd (Underground gas storage) as associated company 100% owned by the mother company. In June 2010, LNG Hrvatska d.o.o. joined the Group as a joint controlled entity, with 50% share owned by Plinacro. LNG Hrvatska d.o.o. was established in accordance with the recommendation of the Croatian Government, as a joint company of Plinacro d.o.o. and HEP-a d.d. the purpose of this joint company was taking over 11% share in Adria LNG d.o.o. – international consortium which was to carry out the project of LNG-terminal construction. The negotiations on joining the consortium were suspended at the end of 2010 due to the decision of Adria LNG consortium to postpone the final decision on the start of the project implementation until further notice, so the further activities of LNG Hrvatska d.o.o. were suspended as well.
As the transmission system operator and storage system operator, the Group has a crucial role in providing conditions for safe and reliable natural gas supply of customers, based on principles of objectivity, transparency and impartiality, with justified expenses of business, operation, maintenance, replacement, construction or reconstruction of facilities and reasonable and socially acceptable return on investment.
In 2010 Plinacro group provided undisturbed natural gas delivery by continuous supervision, control and maintenance of the transmission and storage system, adequate system preparation for the required operating conditions, analyses of conditions in the system and forecasting its behaviour, timely forwarding information on the system and cooperating with its partners (suppliers and customers).