MVM aims to double market value in 3-4 years

Already, the state-owned Hungarian Electricity Works (MVM) has taken steps to exploit synergy of its assets, financial processes and staff in the interest of boosting efficiency, Kocsis said. The company has more than halved its staff from 350 to 150. Kocsis said MVM's disadvantageous position would change when the entire electricity market is deregulated from the middle of next year. Citing an example of the company's unfavorable circumstances, he said the price at which MVM sells electricity fell 7% from the start of 2006 because of centrally-regulated price changes. At the same time, the price at which it purchases electricity rose. Kocsis noted, however, that price rises announced by the government in August had improved MVM's position somewhat. MVM now expects to break even in 2006, as opposed to targeted losses of Ft 9 billion. Last year, MVM had after-tax profit of Ft 1.031 billion. Kocsis noted that MVM is the first power company in Hungary to have separated its trade activities from its network operating activities, as required by an EU directive. As part of MVM's efforts to expand its markets, it recently signed a partnership agreement with state-owned Russian electricity company RAO EES. MVM seeks to form similar partnerships in Hungary and abroad, Kocsis said. (Mti-Eco)