Tauron, a Polish utility, has seen its third-quarter profit increase by 65% due to lower costs

The Polish energy utility Tauron reported on Thursday that its net profit for the third quarter of 2014 increased by 65% compared to last year, due mainly to lower coal and material costs. The group's net profit was also boosted by the increase in distribution costs.

Why it's important

Tauron is looking for funding to support its renewable energy investments.

The company also owns some coal-fired units that receive capacity payments from the European Union. This system expires in 2025. The company said that the units will be closed after 2025 unless a solution can be found to allow them to continue operating.

The company will unveil its new strategy in December.

By the Numbers

Tauron reported a net profit of 635 million Zlotys (155.51 Million). The sales revenue dropped 15%, to 7.75 billion Zlotys ($1.9 billion), year-on-year. Its earnings, before interest, tax, depreciation, and amortization, rose by 23% to 1.48 billion Zlotys on the year, which was in line with company estimates.

CONTEXT

Tauron and other state-controlled utilities in Poland were under pressure due to the falling profitability of their coal-fired fleet. They also had to deal with rising costs of carbon emissions rights, as well as the increasing share of renewable energy output.

Banks are avoiding financing coal-dependent firms, so the government is developing a plan for utilities to separate coal-fired plants. This will increase their focus on green power.

(source: Reuters)