The first half of the year is marked by an epidemic, but also by new investments

October 2, 2020 - The business results of the Zagreb Holding Group in the first half of 2020 reflect the negative effects of the coronavirus epidemic on economic trends in Croatia, which spilled over to almost the entire economy, including the business affairs of the Zagreb Holding Group. The strong earthquake that hit Zagreb on March 22, 2020, additionally affected the realization of operating revenues, but also the total operating costs.
In the first six months of this year, operating revenues amounted to HRK 1.8 billion and decreased by HRK 110.8 million or 5.7 percent, while operating expenses amounted to HRK 1.93 billion and, compared to the same period last year, they are higher by 89 million or 5 percent. In the structure of operating expenses, the most significant increase was recorded by personnel costs, by HRK 63 million, due to the entry into force of the new Collective Agreement, and material costs and services, primarily due to earthquake relief and remediation, and increased by HRK 36.5 million or 3, 5%.

Finally, the operating result at the end of the first half of the year has a negative sign and a loss of HRK 139.6 million was realized at the Group level (at the end of the first half of 2019, a profit before tax of HRK 65.5 million was realized).
In addition, the Government of the Republic of Croatia adopted a number of measures to help workers and the economy due to the coronavirus pandemic, but Zagreb Holding, as a company 100% owned by a local government unit, could not use these measures, all costs due to closure) falls on the business.

Looking at all the activities carried out at the end of the first half of 2020, despite the difficult business conditions, the Group duly fulfilled its obligations to suppliers and investors, including the payment of salaries to all employees with job security, which were not questionable, despite the complete closure of some activities. 



More than 200,000 beneficiaries of the Group's and assistance measures

As a company that primarily operates in the public interest, a number of measures have been adopted at the Group level to help citizens and businesses, in order to mitigate the effects of the epidemic and to help repair the effects of earthquakes. In the period from March to June 30, 2020, the right to one of the measures was exercised by more than two hundred thousand citizens and business users, while the financial effects of these measures amount to about HRK 14 million less revenue. Assistance and support to citizens and the local community was also provided through donations in the amount of HRK 5.8 million.

Realized 26.5% more investments

In the first half of 2020, the Group realized HRK 207.4 million in investments in communal infrastructure and the development and improvement of the quality of services, which is 26.5 percent higher than in the same period last year. HRK 39.2 million was also invested in public facilities realized by the Group companies for the City of Zagreb (construction of the Day Hospital and underground garage of the Clinical Hospital Sveti Duh, upgrade of the Jelkovec Primary School and construction of the Markuševec Home for the Elderly) and construction of the Podbrežje settlement.

Particularly strong growth was recorded in investments in the public water supply and public sewerage system, which amounted to HRK 140.4 million and were higher by HRK 73.8 million compared to the same period last year. City Gasworks Zagreb Ltd. with a total of HRK 31.2 million in investments, it exceeded the realized investments in the same period last year by 8.9% or HRK 2.6 million. The subsidiary Čistoća also continued to invest in communal infrastructure and business informatization, and in the first half of this year it realized HRK 11.6 million in new investments.

More than 3 million Euros in grants have been approved

Since the beginning of the year, the European Commission has approved co-financing for two projects worth a total of 3.6 million Euros, of which 3.0 million Euros are grants. This is a project "Strengthening cyber security for safe and reliable gas distribution" of City Gasworks Zagreb Ltd. in total value of 422 thousand Euros. The project was approved in early May, and a grant of 75% of the project value amounts to 316 thousand Euros. In February this year, the subsidiary Zagreb Freight Station reported the project "Outdoor freight parking lot Zagreb - Žitnjak". The project was approved in July this year. The total value of the project is EUR 3.1 million, and the eligible costs of 85% of the project value are EUR 2.7 million.