Credit rating agency Standard&Poor’s (S&P) upgraded credit rating grade of Hrvatska elektroprivreda from BB+ to BBB-. HEP’s credit rating grade is now equivalent to the sovereign credit rating and for the first time since 2009 it has returned to the investment grade credit rating.
The Agency’s report states that credit rating upgrade reflects HEP’s success regarding robust credit metrics in volatile hydrological conditions and commodity prices. According to analysts from Standard&Poor’s, this is a result of HEP’s gradual evolution towards a market-oriented company with a more flexible cost structure. The Agency also states that in comparison to what was previously captured in the rating, HEP shows it is able to more effectively and more robustly manage its exposure to commodity prices and lower implicit volatility. The report concludes that a very good track record proves the company is committed to maintaining financial strength.
“It was with great pleasure and pride that we received the latest Standard&Poor’s report, which brought Hrvatska elektropriveda back to the global group of companies with investment grade credit rating. Our continuous effort to improve risk management and overall financial position has been recognized, particularly in demanding conditions of the COVID-19 pandemic”, said Frane Barbarić, the President of the Management Board of Hrvatska elektroprivreda d.d. He reminded that owing to very good business results in 2020 HEP paid a part of its profit in the amount of HRK 840.6 million in favour of the State Budget, and continued achieving successful business results this year. In the first half HEP’s consolidated net profit totalled at HRK 1.25 bn, which is HRK 291 m more in comparison to the first half the year before. “Investment grade credit rating will be the wind beneath our wings when it comes to the realization of our ambitious investment plans in the forthcoming period, which are focused on the realization of renewable low-carbon development scenario as well as providing support to the Croatian Government in the activities it has been implementing targeting the recovery and growth of the Croatian economy”, said Barbarić.