In light of recent media reports, in particular regarding the reception which negative business result achieved in 2022 caused in a certain part of the public, we consider important exactly at this moment to clarify and present certain facts.

As we earlier emphasised, negative business result in 2022 is a consequence of extremely unfavourable situation on the electricity market, where the prices of electricity were up to 10 times higher than the prices achived in previous years. On the other hand, the Decision of the Government of the Federation of BiH on limitation of price increases of electricity supply up to a maximum of 20% in comparison with the previous year, our sale price of electricity has been completely limited, well below market prices. Considering that our entire production portfolio consists of renewable sources, and hydrology in 2022 was extremely bad, it is obvious that for the need of securing continuous supply of insufficient electricity to our end-customers, mostly in summer months, we purchased electricity at prices up to 10 times higher compared to selling prices. It is easy to conclude that, due to the abovementioned reasons, the loss was inevitable.

In spite of everything we managed to secure a continuous and quality supply of electricity to our end-customers in these turbulent times. Sacrificing our own profit we amortized the effects of rising energy prices to the industry, households and the economy in the area of our activity, therefore, our mission as a public company has been fulfilled.

Above all, due to good hydrology and due to cost optimisation and good planning as well, in this moment we are pleased to point out the fact that the production of electricity in our plants in the first quarter of 2023 exceeded the planned production for almost 25%, and the profit realised in this period exceeds 50 million KM. This positive trend is expected to continue.

Sincerely,

M.Sc., Marinko Gilja, B.Sc.(El.Eng)

general manager