International rating agency Fitch on July 16 downgraded Slovenské Elektrárne’s (SE) long-term issuer default rating (IDR) and senior unsecured rating to 'BBB-' from 'BBB'. The outlook is negative.
The SITA newswire quoted Fitch as stating that the downgrade and negative outlook reflect the expected increased capital expenditure and delayed time schedule of the Mochovce nuclear power plant's units 3 and 4 as well as the weakening electricity market fundamentals in the central European region, which will likely affect SE's operating cash flow in the coming years.
The completion of the Mochovce units is now running a year behind schedule (unit 3 is expected to be commissioned in December 2014 and unit 4 in December 2015). Fitch remarked that power generators in central Europe suffer from sluggish electricity demand and structural changes in supply, most obviously in the German market. It said these factors are leading to declining wholesale power prices across the region, with the Slovak power market (and its Czech counterpart) closely linked with the German power market. Fitch said it expects wholesale power prices to remain weak over the next few years.
Compiled by Zuzana Vilikovská from press reports
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18. Jul 2013 at 10:00