Hrvatska Elek. Rtd BBB- Foreign/BBB+ Local Curr by S&P.LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/19/97 -- Standard & Poor's today assigned its triple-'B'-plus local currency and triple-'B'-minus foreign currency corporate credit ratings to Hrvatska Elektroprivreda Hrvatska elektroprivreda (HEP) is a power company in Croatia. HEP's annual production of electricity was 11,506 GWh in 2006.[1] References 1. ^ HEP-Proizvodnja d.o.o. - About us (requires Flash) External links
The rating reflects the following positive factors: -- HEP's strong industry position as vertically integrated supplier of about 95% of Croatia's electricity consumption. The company also benefits from strong government support and a cautious approach to sector reform due to HEP's crucial role in executing the state's energy policy and supporting the country's economic rehabilitation after the 1991-95 war. This is reflected in, amongst others, 100% state ownership (not expected to decrease below 75% for the foreseeable future), and continued protection of HEP's status as the country's vertically integrated single buyer -- A strong capital structure with debt/capital projected to peak at slightly above 30% during the current investment cycle. -- Healthy cash flow levels with funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. interest cover projected to remain above 3.5 times. -- A high proportion (55%) of its installed capacity is hydro, leading to low average generation costs. -- Strong demand growth prospects of at least 5-7 % per year over the next five years. The rating also incorporates the following risks: -- Low household tariffs, which -although fairly high compared to some of the other East European systems in transition- continue to understate un·der·state v. un·der·stat·ed, un·der·stat·ing, un·der·states v.tr. 1. To state with less completeness or truth than seems warranted by the facts. 2. the long run marginal costs of household supply. In addition, the tariff system lacks a clearly defined path and mechanism for future tariff rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting and increases. Average tariffs have been linked to the Deutsche mark, though some allowance is made for domestic inflation. -- Underlying shortage of base load capacity, following the stranding of 650 MW of coal fired capacity in Bosnia-Herzegovina and Serbia, accentuated by the fact that about 80% of the company's hydro capacity is pumped storage Pumped storage A process, also known as hydroelectric storage, for converting large quantities of electrical energy to potential energy by pumping water to a higher elevation, where it can be stored indefinitely and then released to pass through hydraulic and import transmission capacity is limited. This forces the company to fire relatively inefficient gas and oil based plant across the daily load diagramme when hydrological hy·drol·o·gy n. The scientific study of the properties, distribution, and effects of water on the earth's surface, in the soil and underlying rocks, and in the atmosphere. conditions are adverse. -- At about 12% of average total capital over the next five years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time investment program - related to renovation and reconfiguration of the transmission and distribution network, plant refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur , and construction of new hydro capacity - is fairly high. This is mitigated by the relatively low development risks associated with these investments and the company's strategy (supported by government) of substantially leaving construction of new thermal generation capacity to independent power producers. -- Unresolved issues regarding the company's nuclear 50:50 joint venture with Slovenia, foremost disagreement about the (Westinghouse designed and constructed) plant's closure date, making it impossible to assess the adequacy of existing decommissioning Decommissioning is a general term for a formal process to remove something from operational status. Some specific instances include:
OUTLOOK: Stable. The outlook reflects the expectation that HEP will maintain its central position in the Croatian electricity system. The outlook on the foreign currency rating is constrained by Croatia's foreign currency rating, Standard & Poor's said. -- CreditWire CONTACT: Amrit Gescher, Frankfurt (49) 69-138709-11 Marc Watton, London (44) 171-826-3641 Juan Jose Garcia Jose Garcia / José García is a common name that can refer to:
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