MET Romania continues upswing
After having purchased two companies, MET Romania Energy continues its upswing. Petre Stroe, CEO: “The integrated vertical business model also requires the development of certain production capacities.”
“A year after the merger with the former Repower and after having overcome the market turmoil, this year we are certain that we will meet the budget targets, having a profit margin of 2-3% of the selling price. The company’s strategy for the following five years will lead to consolidation and predictability, with a focus on improving the quality of the supply service to the benefit of the end client.“
MET Romania Energy is constantly growing. The company has broken acquisition and profitability records, having become in only two years one of the top three suppliers on the local energy market. After taking over RWE Energie, the company has become one of the most important private suppliers in Romania. The merger with the two companies – Repower and RWE Energie, the turmoil on the energy market represented major challenges, which were successfully overcome by the company’s team led by Mr Petre Stroe, CEO.
In an interview for InvesTenergy, the head of MET Romania Energy reveals how he was able to lead the company to the top of energy suppliers on the competition market, as well as its plans for the future. “The integrated vertical business model also requires the development of production capacities which are renewable or use natural gas. We are thus analysing the opportunity of building a new production capacity or acquiring an already existing capacity,” Mr Petre Stroe, CEO stated.
– Mr Petre Stroe, what does MET Romania Energy represent for the Romanian energy market?
– MET Romania Energy has grown, in a short period of time, through both acquisitions and the development of the supply offer and services, becoming one of the most important energy suppliers on the Romanian market. On the competition market we are a viable, innovative, professional alternative to the current “picture” in the electricity and natural gas supply field.
– What makes MET Romania Energy different from other energy suppliers?
– The difference between the different existing competitors is given by the quality of the team and its innovation and financial force. First of all, MET Romania Energy is different thanks to its supply management system: we ensure a price forecast for periods of at least one year, we monitor the risk, including real-time consumption monitoring, predictability and financial soundness. We are responsible for the balancing activity – PRE. In this activity, which MET started in July 2017, we are the third company at national level, after CIGA and Electrica.
The team of professionals and the energy management centre are the strengths of our company. Obviously, competition is high on the energy market, which forces us to innovate and always find new ways, having as final objective the provision of quality services to our clients. The decisions that led to changes in the Group’s activity have always been based on our knowledge of our customers’ needs.
– MET Energy Romania has an Electricity Management Centre, through which you provide risk management to the clients. Could you please provide more detail on this?
– I have said it before and I will say it again: we are the only suppliers at national level and among the very few in Europe of this size to have an Electricity Management Centre operational “24/7”: daytime, night time, holidays etc. At this centre we monitor real time consumption and the reduction of balancing costs to the benefit of our clients.
– Are you pleased with the company’s results? Have the objectives been met?
– One year after the merger with the former Repower, and after overcoming the turmoil on the market, this year we are certain that we will meet the budget targets and reach a profit margin of 2 – 3% of the selling price. What we are planning, and will succeed is to increase business by 10 – 12% in 2018 as compared to 2017. We want the turnover to reach EUR 170mn, the quantity of energy supplied to the clients to exceed 1.7TWh, and the number of consumers to exceed the threshold of 1,000.
– The acquisition of Repower placed MET Romania Energy in the top 10 suppliers on the local energy market. After taking over RWE Energie, the company rose up to Top 3. What does this important position force you to do?
– By combining the two portfolios, MET will reach a share on the energy supply market of approximately 10%, the third position on the energy competition market in Romania, with a total of approximately 5,000 consumption points. This top position honours us and forces us at the same time to meet the supply standards of the traditional companies existing on the supply market. It is a difficult, yet attainable objective.
– MET Romania Energy has announced the completion of the take-over of RWE Energie. What next?
– Swiss MET Group now owns RWE Energie Romania (RWEE), after having successfully completed the purchase of the company’s shares. The transaction was finalized on 3 September 2018, after being approved by the Competition Council. We will now implement the integration and merger plan that was already prepared. As announced, the transaction will be completed in the second half of 2018, provided that the normal closing down conditions – including the approvals according to the relevant regulations – are met.
– Will you make any changes to the structure of RWE Energie: its organisation, business?
– The business model is mainly the same, with more focus on innovation and services related to the supply of electricity and natural gas.
– What will happen with the RWE Energie employees?
– They will be welcomed in the MET family.
– What are the plans/objectives of the company until the end of the year? What about for 2019 and the following three or five years (depending on the company’s medium/long-term strategy)?
– For the current year our goal is to meet the budget targets and get accustomed with the new acquisition. For the following five years (as of 2019), we have a strategy that will lead to consolidation and predictability, with a focus on improving the quality of the supply service to the benefit of the end client.
– You announced that you are also considering some other opportunities on the local market, in order to continue investing. Are you interested in purchasing producers of energy from renewable sources and/or building new capacities for the production of electricity from classic sources?
– In our vision, the integrated vertical business model also requires the development of certain production capacities that use renewables sources or natural gas. We are thus considering the opportunity to build a new production capacity or acquire an already exiting one.
– What are the company’s objectives in the natural gas field?
– In the context of the new sources of natural gas, we are trying to strengthen our position as a supplier by developing our client portfolio.
– How do you approach the Romanian market and how do you get your clients? What services do you provide to your clients?
– We are not approaching anybody and certainly not during contract implementation. We are participating in the tenders organized by consumers, providing sustainable prices, guaranteed throughout the contractual period, as well as related services – energy audit, smart metering. We have a customized collaboration with our clients, we “transpose” the regulations, meaning that we create advantages specific to their activity.
– You stated several times that you are carefully looking at saving and energy efficiency. What have you done in this regard?
– It may seem paradoxical for a supplier to provide services in the field of energy efficiency, which may reduce the volumes supplied, yet we are aware of our obligation to protect the environment obligate by reducing consumption.
– You have extensive experience in the energy sector. What were the main lessons learnt during all these years?
– Reputation is gained through a good collaboration with the end client and the consultancy provided during the contract’s implementation period is more important than the price.
– As you may very well know, a new version of the electricity and natural gas law is in force at the moment. Important amendments were made. For example, suppliers will no longer be able to unilaterally terminate the electricity supply contracts concluded with their end clients. How do you comment on this?
– In my opinion, this is the beginning of normality to force the supplier to guarantee the contract parameters throughout the implementation period, yet it is equally necessary for the consumer to have a similar obligation.