Economy Romande Energie with profit slump in the first half of the year

The energy company Romande Energie posted lower sales in the first half of the year and significantly lower bottom-line profits. However, this was foreseeable after an exceptionally good previous year with one-off effects.

Romande Energie's turnover in the first half of 2024 fell by 13 percent year-on-year to CHF 425.5 million. The decline was partly due to tariffs for regulated end customers and a further decrease in volumes sold to customers on the free market, the French-speaking Swiss company said on Thursday. Losses from the sale of surplus energy could not be included in the regulated tariffs.

The EBIT operating result plummeted by 72 percent to CHF 20.1 million. As expected, the margin in the energy sector was negatively impacted by regulatory requirements. However, the first half of the year was comparable with the first half of 2022.

Despite profit from Alpiq stake

The contribution of Alpiq and EOS NER SA to the result amounted to CHF 48 million, compared to CHF 63 million in the same period of the previous year. Romande Energie holds just under 30 percent of EOS Holding, which in turn holds a third of Alpiq and 100 percent of EOS NER SA.

On balance, Romande Energie earned just 66.4 million (-46%) despite the profit from the investment. The previous year's figure was revised from the original 140.7 million to 122.1 million.

"We are aware that the volatility of margins in the energy sector - caused by the regulatory environment, the markets and weather conditions - means uncertainty for our investors and shareholders", CEO Christian Petit was quoted as saying. The company is working on "further optimizing our procurement portfolio internally and ensuring that the factors of instability are reduced with the relevant federal authorities".

Improvement only from 2025

The electricity supplier also anticipates a sharp decline in the operating result for 2024 as a whole, which is unlikely to make a significant contribution to EBIT in the second half of the year, it added. A gradual return to positive earnings growth should begin from 2025.

The Group also intends to continue its growth strategy with investments of CHF 1.4 billion until 2027 and then extend it at the same pace until 2030. The focus will be on storage and flexibility.

Meanwhile, Chairman Guy Mustaki will retire from the Board of Directors in May 2025. He will not be standing for re-election at the AGM after 20 years on the Board of Directors and 19 years as Chairman.

SDA