Ladies and gentlemen, thank you for standing by. The Electrica teleconference is starting now. Thank you.
Hello, I'm Raluca Casap. I'm Head of Investor Relations, and together with the entire Electrica management team, I'd like to thank you for joining the Electrica conference call and live webcast to present and discuss the full year 2022 financial results, according to the Order of the Ministry of Finance 2844/2016. Those of you who are connected only by phone, please download the presentation in PDF format available on our website on the Results and Presentation section of the Investors section. The participants connected online or through phone can address written questions on the live webcast, or they can intervene live on the Q&A session. Kindly note that since the entire conference is being recorded, all participants will be in a listen-only mode, so the attendees' voices will be disabled.
Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. Note that the recorded presentation will be available on our website starting latest tomorrow, and the transcript as well as soon as possible. We kindly ask you to see the disclaimer on slide 3 of the presentation in front of you. We'll begin the presentations of the financial results, which will be followed by a questions and answers session. Should you have any questions at this time, please send them to the IR at electrica.ro. At this time, I would like to turn the conference over to Mr. Alexandru Chiriță, Electrica CEO, to begin the presentation.
Hello, management. You cannot be heard in the conference.
Good afternoon, ladies and gentlemen. Welcome to our conference. The financial performance recorded by Electrica Group in 2022, on a typical year for the energy market, and not only, is the result of a continuous process of optimization adaptation to economic and legislative development. I thank our colleagues, clients, investors and partners who supported these efforts and contributed to the proper management of the adverse conditions in which we operated last year. Allow me to present you the 2022 financial results in a nutshell. Electrica's results for the entire year are the best since the listing to date, both at the level of total revenues as well as the level of EBITDA and net profit due to both the distribution and supply segment, as you will see in our presentation.
The result was mainly generated by the performance of the supply segment and secondary by the application of the new regulation regarding the coverage of net costs with network losses in the context of the increase in the unit price of electricity, as well as the electricity deficit in the European Union. In 2022, Electrica obtained an individual net profit of RON 24.3 million, and the total gross value of the dividends proposed to the OGMS to be distributed is RON 40 million. The gross dividend share is RON 0.1178 per share. We are aware that the expectation might have been different, but having in mind that we are still operating under exceptional market conditions, the decision was made to act prudently.
We consider that the company's performance is good, taking into consideration the ongoing challenging conditions in the energy market, results that encourage us to continue our strategic efforts to maintain a top position in the energy sector. Most of all, we have been focused to be prepared to quickly respond and adapt to the challenges that kept arising. In the coming period, we will continue the process of adaptation or activities and strategy to market conditions, at the same time counting on a sustainable growth of the companies in the group, so that we can ensure the financial stability and efficiency of all the business lines we own in the portfolio. As for future projects, following the current strategy, we'll continue to develop the production segment, taking into consideration all the restriction coming from the challenges in the supply chain area at the international level.
As you know, we currently have an operational photovoltaic park, one ready-to-build photovoltaic project and interest in 4 other projects which are in different stages of being put into operation. As we confirmed in November, our strategy still aims to develop a portfolio of the electricity generation capacity from renewable sources with a total capacity of 400 MW by 2024 and a total installed capacity of 1 GW by 2026. We are already working on the new mid- and long-term strategy at group level. The red line will be to adapt our business to the complicated ecosystem we are operating in. The regulatory environment is becoming more predictable that in the last 4, 2 years. There are multiple other challenges coming, for example, from the ever-growing ESG requirements of the capital market.
The results that we are presenting today, as well as the strong team that we have at group level, make us confident in the business strategy we have adopted at the group level and in the decisions taken. We will continue to pursue the sustainable and responsible development objectives of all our business segments in parallel with maintaining a high degree of resilience in the face of future challenges. I will give the floor to Stefan to get you through the detailed financial results. Thank you.
Thank you, Alexandru Chiriță. In order to start the presentation of the numbers, I will ask 1st to go to page 3 and explain a little bit the setup related to the presentation of the financial situations according to OMFP 2844/2016. As you know, starting with September 30, 2022, Electrica Group applies the provision of the Government Emergency Ordinance 119/2022, where the additional cost for the purchase of energy made during the period January 1, 2022 until August 31, 2023, in order to cover non-technological consumption compared with the cost re-recognized tariffs are capitalized quarterly. Basically, the expenses with the difference of price of network losses are capitalized.
There are some capitalized asset constituents, which will be amortized on the period of 5 years to match the period of the recuperation to revenues. From point of view of the regulations, of the Order of Ministry of Public Finance to the Order 3900/2022, it was amended the OMFP 2844/2016. It was introduced a new clause related to the regulatory account for these additional expenses for their Own Technological Consumption. Yeah, in the sense of quarterly capitalization of these additional expenses as intangible assets. This Order 2844/2016 regards the localization of the IFRS rules and principles to the local market.
In the IFRS EU consolidated set of financial statement, which will be published until 27 March 2023, these expenses will have a different accounting treatment. When we'll publish also this, we'll publish also a presentation related to explaining the difference. Moving to look at the summary of the consolidated financial statements on page 4. I would like first to put into evidence the increased revenues, which exceed RON 10 billion, which is due to the increased prices of the energy. EBITDA, it's at the level of almost RON 1.4 billion. The net result, it's almost RON 560 million.
In terms of net debt, net cash, you can see that basically the position of net debt has increased with roughly RON 2 billion, which we took as additional financing during 2022 to pre-finance the support scheme on the supply subsidiary, roughly RON 1.4 billion, and also to finance the difference of price of net or losses of CEPE-TE for the distribution subsidiaries for the difference. Moving to the next slide. In terms of the consolidated EBITDA and net result evolution, I would like to point out the main positive and negative influences for the variation of EBITDA. EBITDA is a variation compared with the previous year. It's of RON 1.5 billion, being mainly the cumulative effect of the following factors.
We have a positive variation of energy margin of RON 601 million, both in the supply and in the distribution areas. In the supply segment, we have increase of the margin, of the energy margin of RON 946 million, which is due basically to the fact that we were able to manage in an efficient way the acquisition of energy. We purchased energy very early in the year, trying to be covered as much as possible and mitigating though the risk in terms of being covered for for the energy for the contracts with the final customers. This generated a positive margin in the supply segment.
On the distribution segment, we have a positive effect of RON 555 million from the increase of the revenues in the energy distribution due to the increase of the tariffs, starting April 1, 2022, in order to recuperate the difference of price for network losses from 2021, with a negative effect of slight reduction in the volumes of energy distributor, distributed approximately 4%. There is a negative effect related to the increase of expense with purchased energy to cover network losses, the ones which, as we explained, were capitalized according to the Ordinance 119. We mentioned then the capitalization of the additional cost with the purchase of energy as revenue from the production of intangible assets in the amount of RON 989 million.
As other effects, we would mention a negative variation of OpEx of RON 75 million, which is mainly due to negative impact from a variation of the adjustment from the depreciation of trade receivables and other receivables. As a result of the receivables recoverability analysis according to IFRS 9, I should point out that this is not necessarily an effect of, you know, decreasing the quality or having an issue of collecting the receivables. There were situations in which due to the changes in the legislation, with the changes in the support scheme for the end consumers, we had the situation in which we basically issued the invoices later compared to the month of consumption, because we needed to make the necessary adjustments and developments in the IT system in order to implement changes to the algorithm.
It's not necessarily an issue related to collection. We have done an increase of RON 21 million of the costs with the salaries, employee benefits. From the distribution segment, which was diminished by the negative effect on the other segments. Decrease of the costs from the distribution segment and from the service system segment with repairs, maintenance, material expenses. If we are looking at the variation of the net profit, the difference is RON 1.1 billion, and this is mainly due to the effect of the EBITDA evolution. With a negative correction, a negative effect of the financial result, which is an effect of minus RON 138 million.
In order to pre-finance the support scheme and in order to pre-finance the network losses for the distribution subsidiary, we need to take loans. You saw the situation about the net debt, those loans have interest, and this interest was also on an increasing trend, so we have an additional cost here. Then, we have also a negative evolution of the expenses with depreciation amortization of fixed assets of RON 56 million. Then, of course, the impact of the expense with income tax of RON 185 million compared with the deferred income tax from last year. Moving to the next slide, we would present some numbers related to, with slide 6, related to the position on the market. We are the leading player.
We are still the leading player in distribution and supply as per the latest available ANRE data from November 2022. We have almost 40% quota on the distribution in terms of volume distributed. In terms of market share for the supply, we have almost 18% market quota in January and November, and we have also relative is even larger market share, 30% in terms of electricity supply to customers in competitive regime, universal services, supply of last resort instance. Now, if we move to analyze the segments, we go to slide 7, we have the details related to the distribution segment.
The highlights are related to the fact that the EBITDA of 2022 increased by RON 645 million compared with the one for 2021. With the impact of the elements mentioned below, there is decrease in energy margin of RON 345 billion that I have mentioned, I have covered in the general slide about the evolution of net profit and EBITDA. Then, of course, the effect of the capitalization in terms of RON 989 million, the capitalization of the net loss costs. We had some impact related to favorable impact from adjustments of depreciation of receivables, RON 52 million, mainly as a result of reversal of some provisions related to insolvent clients.
Increase of employee benefits with RON 38 million that I also mentioned previously is a result of the alignment of the provisions in the collective labor agreements in all the three regions. The impact generated by salary increases and other benefits. We have also an increase in operating expenses to be mentioned, mainly from cost of utilities, rent costs, buildings, cars, and bank loan commissions. There is also an effect of RON 6 million from increasing uncontrollable costs, because last year we moved from the frequency of readings of the meters at 6 months to the frequency of reading of meters at 3 months, and this generated an additional cost. Other operating income brought a favorable impact of RON 37 million, mainly coming from the capitalization of cost of investment work.
As a result, the net result for distribution segment increased by RON 447 million, mainly related to this evolution of EBITDA, to which of course we had the negative impact of evolution of the financial result with a minus RON 79 million. We explained it, the matter related to the financing of the difference of price for network losses. We should mention that according to Ordinance 119, this capitalized asset, which is constituted for this difference of price for the expense, is to be remunerated with a rate equal to half of the regulated rate of return. Basically, this is bringing back some recuperating some of the costs related to the financing. The favorable impact of the distribution segment results mostly from the capitalization, of course, of network losses.
We have this additional cost of RON 989 million, which will be recuperated in future tariffs in a period of 5 years, starting with April 1, 2023. It's also worth to be mentioned that starting with April 1, 2022, we had an increase of the distribution tariffs with on average 20% in order to recuperate the difference for network losses from last year. The increase in net debt is by RON 691 million compared with 2021, coming mostly from increase of overdraft, the lines which we took in order to finance the difference of price for network losses.
This is now in process of being refinanced under facilities on 5 years in order to match the expiration date. There are the specific details that we always include in our presentation in terms of distribution segment. In slide 8, the details regarding the We entered this current regulatory period coming from the previous regulatory period. We have the waterfall in page 9, which is analyzing the regulated net results 2022 for the distribution segment, and the one which is more interesting for you for the analysis in slide 10. The evolution of RBAR, starting from the RAB.
Yeah, including the correction, annual correction, net losses, differences, et cetera, where we point out all the elements that are bringing us to the accounting EBIT. We also have the details on the regions, which are in slide 11, 12, and 13. In terms of slide 14, I would mention the details about investment. Basically, at the end of 2022, we realized and commissioned in the distribution subsidiary, investments representing 82% of the value of the program planned for 2022.
Of course, there was a matter regarding priority what to finance first because with a CapEx plan of half a billion RON, but almost RON 1 billion to finance a difference of price from network losses, we were in such situations, you know, slowing down the parts related to the commissioning of investment. We are confident considering the mild winter and the good weather that we should recuperate by mid this year.
In terms of Electrica Serv, the results show an increase of RON 6 million in EBITDA compared with the same period 2021, mainly as a result of the increase in income with RON 14 million, due to the fact that the situation in the world market and the increase of demand for energy generated an increase of demand for photovoltaic systems, which are representing the new focus of activity for Electrica Serv. Which generated the conclusion of new contracts. The net results for 2022 increased by around RON 50 million, mainly from the evolution of EBITDA, but also the financial results and offset by the increase in depreciation amortization. Financial result is positive because Electrica Serv historically has a significant level of cash, significant compared with the size of the company.
Basically this is optimized and utilized to the cash pool structure at the level of the group, but they are net creditor in this structure. If we go to the supply segment for Electrica Furnizare, slide 16, I would mention that EBITDA significantly increased with RON 831 million compared to 2021. With the effect related to the evolution of the energy margin that I also explained at the beginning. Basically, we had an increase in the revenues from the supply of energy of natural gas by RON 2.4 billion, mainly as a result of an increase of price in the selling price of energy.
Other operating income increased by RON 2.7 billion, which is represented mainly by the subsidies in the amount of RON 2.7 billion, roughly. Values to be recovered as regard as a result of the application of the support scheme, which was introduced initially by Government Ordinance 119, 118 from 2021, and then further amended, Government Ordinance 27 per 2022 and then amended in September, Government Ordinance 119, 2022. In terms of purchased energy costs, We have an increase of RON 4.1 billion, which is generated by the increase of the energy purchase price.
As you see from this, the elements we generated also in the energy margin, positive results due to the fact that we had the good strategy of mitigating the risks in terms of purchasing energy, early in the year on, term contracts, on forward contracts, and not being so reliant on the day-ahead market, sorry. We also have some small effects related to some unfavorable effect of the variation of green certificates purchased and unfavorable effect of RON 94 million related to impairment losses of trade receivables, which is a result of the analysis based on IFRS 9, but as I mentioned before, this is not necessarily reflecting any share amount connection.
The net profit increased as a result by RON 651 million, mainly from the positive evolution of EBITDA, as I've mentioned before. Also a reduction of the financial result of RON 54 million because we had increased costs in terms of the additional financing lines that we took in order to pre-finance the support scheme. We are, however, in the situation in which basically compared with the 70 RON per MW, which is the cost of supply realized paid through the Ordinance 119. We have a significantly lower cost base, and we are able to recover from the differences which the efficiency is led to us generating a profit. We are able from this difference to cover the interest, the increased interest costs.
Net debt increased by RON 1.2 billion compared with year-end 2021 as a result of the increase of overdraft, as I mentioned, which overdraft and multipurpose lines, mainly used to pre-finance the support for the supply chain for the end consumers. In terms of supply market, we have analysis of the market quota in the next pages in terms of also the split of portfolio between household, non-household, supplied volume and consumption places. Also, if you would like to see the evolution on page 18 in terms of key aspects of the market, you can see that 2022 is bringing a significant volume of electricity as supplier, as a supplier of last resort.
There will be situation in which a number of suppliers, due to the current market situation with the increase of prices and not having necessarily the volume, the energy sourced, secured through term transactions, through forward transactions, and having the dependency of the day-ahead market. They let some of the customers to the supplier of last resort, and this was taken over by us and by some other suppliers, which were suppliers of last resort in the respective months.
Also, in terms of financial impacting of the electricity market perspective evolution, you have a summary which is showing the weighted average price evolution on day-ahead market 2021 compared with 2022, and also on the balancing market in terms of evolution of the prices. Also, the next slide is presenting the evolution of receivables. In terms of outstanding receivables, you see that basically when we adjust them with the turnover, it's not such a difference is not so big as it might seem in notional terms.
When you look at the details about IFRS that I've mentioned, in fact, there are now not really some issues related to receivables being collected with delay, but sometimes it's about us being only able to invoice with delay compared with the consumption month, because we needed to make some adjustments related to the changes in the algorithm of the support. Page 21 is showing the liquidity position for the Electrica Group. You saw the evolution of the liquidity position. I think the graph itself is self-explanatory. I don't want to detail too much. You can see that basically, compared with the situation at the beginning of 2022, the situation has improved and also in terms of liquidity, so has improved.
We still are financing the support scheme, we see that the mechanism got more operational, more oiled in terms of, you know, also in terms of us being able to file in for the request for the subsidies, but also in terms of getting this analyzed and and approved and paid. There is the mention about the dividend distribution. Alexandru has touched this subject. What I would mention is the fact that basically there is always this delay in terms of of, you know, when the operational subsidiaries are generating a profit and when this can be paid to the shareholders of Electrica.
If the operational subsidiaries have a profit which is registered in the year T, then these are to be distributed as dividends to Electrica in the year T + 1, and they constitute financial revenues for Electrica in T + 1, which generate profit at the end of the year T + 1, and this can be distributed only in the year T + 2. Basically, we are in this situation in which basically since in 2021, we had the loss situation on the operational subsidiaries. In 2022, we didn't have any dividends paid to Electrica, which to be able to be constituted as a significant financial revenues and to be paid as dividends. There is also the element that was mentioned by Alexandru.
We see that there is still some volatility and some uncertainty related to the market. We are very keen on securing our liquidity position, and we would not exclude, I mean, depending on the evolution of the market, to see what will happen in the second part of the year. You have the slides related to the presentation of the group, and also details about the legislation, the main corporate governance events, and so on and so forth. I would say plus the usual annexes that you are used to have from our presentations. I would stop here and just invite you to provide with your questions, and we'll try together with our team here to answer as clear crystal as possible. Thank you.
Ladies and gentlemen, we will take a two-minute break, and then we will start the audio questions. Thank you.
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The first question is with the line of Ciopraga Iuliana with WOOD & Company. Please go ahead.
Hi, good afternoon, and thank you for the presentation. You mentioned something about financial cost for supply. Can you clarify, are you able to recover them or not? Secondly, regarding the Regulated Asset Base, the number you provide about the Regulated Asset Base, is this adjusted for inflation? Also, can you clarify what's the accounting value of the Regulated Asset Base, the one that will be taken into account by the regulator, so the book value, but the one that the regulator will assess as of end 2022? Also regarding the revenue from the capitalization of network losses. In the fourth quarter, that was around RON 209 million.
That seems a bit low if we look at the price, what was included in tariffs and the quantity. Can you explain? Thank you.
Okay. Thank you, Iuliana, for the good and detailed question as always. I will take from the last to the first, and if I just don't remember something, I'm sure one of my colleagues will help. In terms of the capitalized costs for fourth quarter 2022 of RON 209 million in tangible net current cost, while you mentioned that it might seem that the difference between realized price in the fourth quarter and the price recognized in tariff should be higher.
The idea is the following: according to the regulation of the ANRE, or the Order 129/2022, the amount of network losses related to fourth quarter 2022 used for capitalization was determined by allocating the annual amount of network losses forecast at the beginning of the regulatory period, depending on the weight of the amount of network losses realized in quarter four 2021 in the total amount of network losses realized for the year 2021.
Basically, they came with a calculation mechanism which was established through their order, in which they took, yeah, the forecasts from the beginning of the regulatory period, and they made a split of fourth quarter compared with the year based on the split fourth quarter compared with the year in the previous year. This is why this amount was generated, yeah? For the total year of 2022, we capitalized the difference between the network losses cost recognized and exempting the tariff and the network loss cost recognized ex-post, yeah?
The cost of network losses recognized as entering the tariff was RON 841 million , which was established based on the quantity of network losses approved at the beginning of regulatory period of 2.1 TW, with the price of RON 392 .
In terms of the costs, the financing costs for the supply subsidiary, as mentioned, in the support scheme which was approved through 118 from 2021 and then amended, 27 from 2022, and then further amended through ordinance 119 from 2022, et cetera, we have the right, yeah, to ask for a flat amount of 73 RON per MW as supply cost overall, and even RON 80 per MW for the part which is representing customers that we took in, supplier of last resort. This is an amount which was established by the regulator as an amount which to cover pretty much all the suppliers.
In case of a big supplier like ourselves and like the other big suppliers, we do have economies of scale, and we are able to have, on average, a significantly lower cost of supply effectively than this amount. We are allowed to keep the difference to save this to cash in on this efficiency. Yeah. From my effective cost, up to RON 73, there is room to cover for the additional interest expenses and to generate the profit that we have also generated in 2022. In terms of RAB value-
So basically-
Yeah.
Basically, you need to recover the financing cost from the RON 73. This is how it would work. There's nothing set in stone.
We recover at each request of subsidies, because at the request of subsidies, this has a component related to.
Y ou know, difference between the capped price to the customer and the average acquisition cost, plus the part related to the tariffs, distribution tariffs, et cetera, plus this part related to the supply. In each month, we are having.
T his included in what we are recovering.
Okay.
Moving to distribution. To the question about the RAB value. The RAB value at 31st of December 2022 does not include inflation. We are in process of having an update revaluation with inflation, having inflation that we had the situation of last year, which was basically a situation of hyperinflation, more than 10%. The RAB depreciation is higher than the realized commissioning, you know, PIF. RON 497 million depreciation versus RON 479 million commissioning. You also asked-
Can you repeat the depreciation value?
Sorry?
I'm sorry. Can you repeat the depreciation value? Regulated depreciation.
RON 497 was the depreciation, and RON 479 was the commissioning.
Okay.
Yes, we do expect that we will be able to recuperate the part related to unrealized CapEx for 2022. As you know, according to ANRE Order 98/2022, in the first month, 6 months of 2023, investments not made in 2022 can be recovered without fines from the regulator. Okay. In terms of evolutions of I'm also moving to your questions that you asked also in writing. If I skip something, please let me know. How do I see the operation costs for distribution, excluding network losses and supply, evolving in 2023?
Now, this would be a forward-looking statement that I would invite you to see in the detailed materials that we'll publish with the budget until 27 of March for the GMS meeting from April. We are now in the last meters for finalizing the budgets, and we have the final workshops on that. Of course, evolution of operating cash flow. As you saw, just as a comment, in terms of the distribution, the mechanism of the centralized market is basically providing us with 75%-80% of the energy that we need to cover the network losses and at RON 450 price.
This combined with the fact that the market prices have decreased, make us confident that in terms of the distribution, we will not see any year with pressures in terms of, you know, differences, large differences of network losses between the ex-ante price that will be established 1st of April and the effective average price. In terms of the supply, of course, we are monitoring tightly the situation, purchasing energy from the market when it's possible.
We are very efficient, I think, compared also with some others in the market in terms of, you know, running the reports, filing in for the expiration of the subsidies, you know, focusing on invoicing, even when we need to stop the system to implement changes from the changes in the support scheme in the algorithm.
Yeah, since we don't necessarily rely on, you know, intragroup loans, from other company and we need to finance locally, we are paying a lot of attention to the overall indebtedness. This was also seen, you saw probably that Fitch Ratings reaffirmed our rating last week, we are very keen on looking on that. This is why we are able to file in quite efficiently, you know, for the reimbursement then validate quite efficiently with the regulator and so on and so forth. Can you provide some details of CapEx and timing for commissioning for the RES pipeline? As you know, we have some projects which are in our pipeline. We mentioned this in the past. It's almost 300 MW.
The details on the CapEx and on the quantities you'll see in the budget. For the budget, we will use this moment, which is a forward-looking, forward communication that we will show. We'll also mention about expectations of what we would like to commission this year. We prefer to be rather more conservative than too optimistic. Okay, let me check on some others. Yeah. Some details, some also details or some of your questions in terms of cash flow position, you mentioned. We don't expect necessarily with monitoring tightly the liquidity, we don't expect to have a cash flow position which to be worsening compared with 2022. Yeah, I think this is covering this question.
Moving, the is the revenue from related to capitalization of net or losses recorded by Distribuție Energie Electrică, distributable to Electrica, is going to be distributed to Electrica. Yes, it's a revenue which is a distributable revenue. As you really pointed out, there is a part of this revenue which will be collected in 5 years. This is not something which will be cashed in or was cashed in at this moment.
Basically, since we are focusing on growing and developing our operational subsidiaries and also the ambitious targets in terms of also investing in the CapEx of the distribution subsidiaries, both to recuperate the part not commissioned last year and also in terms of ambitions for this year, we would not consider to have a dividend distributed from the supply distribution subsidiaries just to be on paper. You know, I could not really get that cash out of the company.
In general, we would look in a position in which basically to mitigate somehow between, you know, the needs of investment of the subsidiaries versus, yeah, the amortization and, you know, how much more CapEx compared with amortization is sustainable on a long run. Okay. You mentioned the new tariffs that should be announced by April. What are the main drivers for adjustments? Please tell on both the positive and negative expected impact. As mentioned, the tariffs should reflect the beginning of recuperation of the difference of price for network losses for 2022.
I cannot really speculate right now on amounts or percentages, but I just can say what I think I also briefly mentioned before, that we do expect that for this year, we will not have any significant difference between the average price for network losses and the expected price which will result from that. Basically, it should be a fairly important increase in tariffs. As you know, the recuperation of network losses from the past, from 2022, according to Ordinance 119, is stipulated as a separate component. It's not included to the cap 7%, which is in the traditional regular methodology of the ANRE.
I think that by the moment, of course, when this is established, we'll come with a current report, probably by 27 of March, when we'll have also the budget proposal or budget published. We will also have this information in terms of this timing. Do you have any visibility about new distribution tariffs? Yeah, we mentioned also that I would not really like to speculate, but it should be fairly significant. Okay. How much have you cashed from total amount to be received from subsidies? Just to give you a flavor of it, we do have. First of all, there is a delay which is an operational delay, in how soon can we file in from the subsidies, for the subsidies.
From the month of consumption, I can only file in 2 months' time. Because I am getting the data. The algorithm supposes to have also a calculation related to for the reimbursement related to the costs, which are on the balancing market. The data from the balancing market, it's only delivered at 1 month and a half from the end of the consumption month. For example, for October 2021, we were able to only, you know, have the data in mid-December. We need to run the reports, we need to check the reports for, you know, errors, validate them, we need to patch them and send them to the regulator. There is the discussion about getting validated for the regulator.
This works fairly quickly now with the regulator because the mechanism was oiled. The regulator has established, like, relationship managers, like dedicated persons for each of the large supply groups. Basically, they know our specificities, we know their requirements, and we are able to validate quite quickly. Then it goes to Ministry of Energy or to ANRE for being repaid. Just to give you a flavor, probably out of what we have issued last year, we have something like. And we have filed in, you know, By the end of the year, we have something like less than RON 150 million-RON 200 million as of today to be recuperated.
Please note that December, we were able to only file in February, end of February, beginning of March, because of this mechanism that I've mentioned. What's important to mention is that, starting with the Ordinance 192, for the amount that we'll be able to start claiming beginning of January, there is a change in the mechanism in the sense that once we say we send the files and the request for the reimbursement to the regulator. Even before the calculation, we are entitled to get 40% to help us on the cash flow, recoverability.
Basically, for the difference, they consider that basically the difference is any difference in calculation or amounts which are not cleared, which are not confirmed between us and the regulator, are supposed to be covered by the 60%. We will see from the next request for reimbursement that will send how this will happen. If there are other questions, I will ask also my colleagues from me or for the investors on the audio line or.
As a reminder, if you would like to ask a question, please press star and one on your telephone, and for those on the webcast, please type your questions via the box. Once again, to register for a question, please press star and one on your telephone. We have a follow-up question with the line of Iuliana Ciocirlan with Wood & Company. Please go ahead.
Hi. Just a clarification, actually, I wanted also regarding the Regulated Asset Base. You're saying that the number does not include inflation. What I wanted to know, for the previous years, so until 2021, the RAB is adjusted with inflation or not? I mean, is it something specific that you've done only for 2022 when you didn't include inflation, or you haven't included it for previous years either?
Basically, the idea of updating with inflation comes from 2 drivers. The first driver is that at the end of each regulatory period, for the cumulated inflation in the respective regulatory period, I am having the right from the regulator to be receive an increase of the RAB, which is important. This increase is to be done only up to the net accounting value of the assets which are in the RAB. What happened in the past and in a previous period and so on is that since a long time ago, we didn't have, in Romania, inflation so high. Inflation cumulated was not really so significant, and it was not so important as an impact, you know?
If you look at the episode of inflation in last year, probably the accumulated inflation for the period for quick and dirty will be 25%-30%, I don't know, just ballpark figure. Considering also the fact that last year we had this inflation, yeah, hyperinflation, depending on calculation, some calculation, so it's 13%, 14%, whatever. We initiated this revaluation of the assets in RAB also in order to reflect the situation related to the hyperinflation, but also to have room in terms of this revaluation at the end of the regulatory period.
Basically you want to be conservative, and at the moment you did not reflect the inflation for 2022. For the previous years, you did it. I get you included inflation, right? It's not significant, but it is there. Right now you find yourself limited by the book value of the assets. This is what I understand from your statement, right?
The value at the end of 2022, RON 6 billion.
Mm-hmm.
This includes the inflation from the pre-previous year. Of course, we keep this. The point is, to be sure that in terms, there is one thing, you know, there is the RAB value, whether it includes inflation or not, and then there's the net accounting value of the assets in RAB.
Yes. Exactly. I understand.
Yeah. The RAB includes the inflation. The point is now, since inflation is very high, we would like to have also an update on the net accounting value so that we don't have an issue with the cap, you know. The regulation is saying we are getting the inflation up to the-
Yes.
Maximum, value of the. Yeah.
Yes, the RON 6.1 billion that you're mentioning right now, that does not include inflation. I mean, you include inflation up to end of 2021, right?
I will-
2022, because I'm a bit confused right now.
I will recognize now that I will let my colleagues, which are smarter and more into the problem, I invite Janina to help with some clarification. Thank you.
For the RAB end value 2022, this 6,156, this value includes the inflation for 2022. The value is 3.76. This is the inflation already included in the end RAB value. What Stefan mentioned is that we cannot keep this inflation at the end of this period if the report between net book value and RAB are not the right report.
I understand. I understand.
At the end of the-
But the three-point seventy.
3.76% is the inflation recognized in the tariff for 2022. So this RON 6 billion, okay, include this 3.76 inflation for 2022.
Okay.
Is it clear?
Yes. That means that when you have new tariffs for, from starting April, at that time, most likely you will have the actual inflation for 2022 recognized, not in revenues, not in RAB, of course. Will you adjust the RAB at that time or you will adjust the RAB only after you revalue the book value of the assets? How do I put this better? So the inflation-
The inflation rate will be correct in T + 2 year. This is a mechanism already mentioned in the methodology. For 2023, the inflation is 13.69%. This inflation for 2023 will be recognized in the tariff for 25. This is a mechanism to recognize the inflation in the tariff in the year T + 2.
Okay. Okay.
ANRE will correct the inflation aligned to the realized inflation. Okay.
Understood. Yeah, the adjustment with inflation will be done in T + 2 , not necessarily for April.
Yes. Exactly. The inflation will be corrected for RAB just if the report between net book value and RAB will be the right value.
Can you let us know what is the book value of the assets as of end 2022? Under Romanian accounting standards, not under IFRS. Under IFRS I think we already have the figures. I mean, what's included in the accounting of the subsidiaries, the distribution subsidiaries. Is there 6.1 there as well?
Just a second. Just a second to check on the numbers. Just ballpark figures. Yeah. The RAB is RON 6 billion, roughly. Yeah. The net asset value of the RAB asset at the end of 2021 is RON 6.2 billion, so it's higher. Yeah.
Okay.
But t his is subject to revaluation now, and up to 27 of March, we'll have the value, and it will be clear. There is another question. Yeah, please.
Just regarding the tariffs, actually, I had a question regarding tariffs, if I may. The main adjustments that will be done in April, on the one hand, you will lose what was recognized in tariffs for 2021. Secondly, you will get this adjustment for inflation for 2023. Is this what? Are these the main corrections that you expect?
We will not have correction for the price of CPT for 2021 in the tariff for first April 2023 because this correction has already done.
Yes. Correct. Of course.
This correction is. Exactly. We will not have this correction for 2023, for this 1st April.
You'll have just the. As a plus, on the other hand, you will have the inflation for 2023. Right now I see an average from the prognosis committee, whatever that's called, around 11%. That's what we'll probably see, right? Right?
Yes. We calculated already the inflation corrected for 2021, and we estimate for 2023 is 13.7% inflation.
Oh, okay. Okay. Okay. 30%. 13.7-
Yes.
Includes both, 2021 plus 2023.
Exactly.
Okay. Okay.
It's already corrected. Okay.
Thank you.
There is one more question. What is the usual payout ratio for Electrica subsidiaries, Electrica Furnizare and Distribuție? What about this year proposal? What is the usual payout ratio for Electrica Furnizare? What about this year proposal? First of all, in the policy for dividends that we had in place until last year, and we amended last year, we had a range of distribution payout between 65% and 100% for distribution from Electrica to their shareholders. Pay attention, from the net distributable profit, and the same percentage was to be applied also for the subsidiaries.
Last year we had an amendment of the payout ratio of the distribution policy, which basically now is not considering any percentage which to be given, and this is reflecting the fact that we would like to invest and to develop the green energy generation. When we are in a strategy of investing and growing, we need to keep some of the profits in order to grow and, you know, generate, you know, have new capacities which will generate new EBITDA and, you know, to be able to give dividends further in the future. In terms of the subsidiaries, Electrica Furnizare is not in position to give any dividends, although it had a profit, because it needs to recover the losses from 2021.
In terms of Distribuție, yes, there is a profit which is there and would allow for a distribution of dividends. As explained, since part of it is not cash, cashed in, but will be recuperated from tariff in 5 years, the decision is just. On the other side, the company needs to further invest for the CapEx plan, et cetera, not to have a payout dividend from Furnizare, from Distribuție at this time, because if from cash point of view would have meant just, you know, to get some revenues and debit cash from the subsidiary and then send it back immediately to the subsidiary, you know. It will be part of the revenues from the capitalization of net losses will be recuperated from tariff in 5 years.
I hope this clarifies.
As a final reminder.
Yeah.
To register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.
Thank you for participating at our event. If you have any questions at any moment, please send us emails to ir@electrica.ro or call us. We're here. We'll get back to you until the 27th of March with the IFRS EU financial statements, with the budgets that are being submitted to the ordinary general meeting of shareholders. We invite our shareholders to the meeting on the 27th of April. Thank you, everyone.
Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.