The electric company paid twice as much for coal in 2022 than the year before

The Electric Company concluded the past year with a 4.5% growth in revenues to NIS 23 billion, but also an increase in expenses following the war in Ukraine and the spike in fuel prices; Net profit increased by 36% to NIS 1.8 billion

The financial results of the electric company, which will celebrate its 100th anniversary at the end of the month, tell the story of many energy companies in the past year: an increase in expenses due to the war in Ukraine and the increase in fuel prices, but a jump in revenues and profits due to the increase in the electricity tariff.

The Electric Company concluded the year 2022 with a net profit of NIS 1.8 billion – 36% more than the profit in 2021.

The company’s revenues grew by 4.5% to NIS 23.1 billion. Most of the growth was due to an average increase of 8% in the electricity price. At the same time, the costs of the Electric Company climbed by 13% to NIS 24 billion.

Although the company’s expenses were higher than its income, the company ended the year with a profit because the Electricity Authority allowed the company to write off the debt for the following years – in order not to raise the electricity rate even more.

The impact of the war in Ukraine on the price of electricity was felt by Israelis less than in Europe, mainly due to the presence of natural gas reserves on the shores of the Mediterranean Sea and the sale of natural gas in long-term contracts for local supply.

The private electricity producers, who during 2023 are expected to produce more than half of the electricity in Israel, produce electricity with natural gas and renewable energies. The Electric Company is the only entity in Israel which produces electricity using coal – It has to be imported.

Due to this, the electric company’s fuel costs increased by 67% during the year 2022, to NIS 9.2 billion. The cost of coal rose to NIS 6.3 billion, 126% more than in 2021. However, during the year, the company signed a new natural gas supply agreement with the Tamar reservoir, which reduced the average price of natural gas by 13%.

The company’s salary costs stood at NIS 1.2 billion in 2022, a 7% decrease from 2021, which is mainly due to a reduction in the number of employees in light of the company’s reform from 2018, in which it committed to reducing the number of permanent employees in the company. At the end of 2022, the electric company has 10,121 employees, compared to 10,487 at the end of 2021.

The electric company raised NIS 8 billion in the past year, which raised its financial debt to NIS 34.7 billion – 7% more than the debt at the end of 2021.