Transelectrica 4Q 2010 results

Revenues were higher by 8.2% than our estimate at RON 698 mn, but it could be because of higher than expected pass-though revenues (balancing). The operating profit stands some 34% lower than we anticipated at RON 22 mn and 40% below consensus estimate, mainly on higher than we expected depreciation. We expect the company commissioned new investments in 4Q 2010 which drove higher the depreciation expenses over the quarter. On the other hand salaries were slightly lower than our estimate. Financial losses of RON 15.3 mn, somewhat higher than we foresaw, lowered the net profit to RON 4.7 mn, 77% lower than our forecast. The 2010 reported profit reached RON 9.9 mn. The results are disappointing but we do not believe investors expected a strong profit in 2010 and for the moment we tend to view the results as neutral.

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