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McKinsey warns on PPC

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McKinsey consulting group warned in a report to the company that PPC is not viable and will need to take specific steps to restore its position. 

According to BETA Securities, McKinsey’s five-year plan, proposes that PPC improves its operational profits by 500 million euros over the five-year period, for which it will have to adopt a voluntary retirement plan for 2,000 employees and an increase in pricing, starting with the gradual reduction of PPCs current discounts and the imposition of increases on specific customer categories. The most economically competitive technology in the coming years will be the renewable energy sources (RES), as construction costs for new capacity are being reduced, McKinsey points out, and calls on PPC to increase its RES production capacity by 2.5 GW by 2030. A key proposal is also to intensify efforts to deal with unpaid bills and noted the company will have to reexamine its exposure to the retail market even after the proposed business plan has been implemented. McKinsey’s plan also provides directions for safer investments in distribution and in new activities such as liquefied natural gas (LNG) and energy services, noting that PPC should carefully assess many other products and focus on those that can be applied in the Greek market.

On McKinsey report BETA Securities notes that PPC current headcount is 17,519 employers (11% reduction) implying on average a 94m p.a. cost savings. PPC RES portfolio contributes just 2% of its total revenues while unpaid bills in 2017 reached €1.32bn (Net receivables) of which €704 are considered delayed.

PPC commenting on the press report that revealed McKinseys warnings said in an announcement that: the recent Sunday press report is based on a leaked old working document of McKinsey and is not the final proposal for the Business Plan, which is currently being concluded. As already mentioned by the Company in its announcement dated 26.02.2018, again concerning comments on press reports which were marred by inaccuracies with respect to the refinancing of loans and its Strategic and Business Plan, PPC will proceed to the relevant announcements for the accurate information of the investor community upon the completion of the Strategic and Business Plan and its approval by the competent bodies of the Company.

 

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