Elektroprivreda Srbije (EPS) concluded the year 2025 with a notable increase in net profit, reaching approximately €360 million, which marks an increase of around €150 million compared to the previous year. This financial performance comes despite facing significant challenges, including adverse hydrological conditions and an ongoing workforce transition within the company.
The operational environment throughout 2025 was particularly difficult as Serbia experienced one of its driest years in over three decades. This severely impacted hydroelectric output, a key component of the country’s energy generation capabilities. The reduced water inflows affected both reservoir and run-of-river plants, increasing operational stress and necessitating a greater reliance on thermal generation to meet energy demands.
In addition to environmental challenges, EPS underwent a substantial transition in its workforce, with approximately 1,000 employees retiring during the year. This shift primarily impacted mining operations and areas requiring intensive maintenance. Although this transition is anticipated to lower long-term fixed costs and enhance organizational efficiency, it resulted in short-term operational constraints that compounded production difficulties during the challenging hydrological period.
Despite these obstacles, EPS successfully maintained system stability and minimized reliance on costly electricity imports. The increased utilization of thermal power plants and enhanced operational coordination enabled the company to offset the decline in hydroelectric output while managing variable costs effectively. This resilience played a crucial role in driving profit growth alongside improved internal cost management and more strategic capital allocation compared to prior years.
A significant development in 2025 was EPS’s direct ownership of renewable energy assets. The company commissioned 76 MW of new wind and solar capacity, representing a strategic pivot towards diversifying its energy portfolio. While this addition is modest relative to EPS’s total installed capacity, it indicates a fundamental shift in the company’s long-term generation strategy, integrating renewables as a core component rather than as an auxiliary support.
Investment activity remained strong throughout the year, with total capital expenditures amounting to RSD 52.7 billion (approximately €450 million), achieving 97% of the planned annual investment program. A majority of this capital expenditure was funded internally, showcasing an enhanced cash-generation profile and reduced reliance on external financing. The investments were primarily directed towards maintaining the reliability of the thermal fleet, implementing environmental upgrades, and preparing for large-scale energy transition initiatives.
Looking ahead, EPS is set to advance a solar and battery storage complex with an estimated capacity of around 1 GW, which is expected to enter construction phases starting in 2026. The ability to progress such projects using internal resources underscores the financial improvements made over the past two years and highlights EPS’s growing capacity to undertake capital-intensive projects without compromising financial stability.
From a structural standpoint, the results for 2025 indicate that EPS has moved beyond merely reacting to external factors such as hydrology and fuel availability. The company has demonstrated its capability to absorb external shocks while managing internal restructuring effectively, resulting in increased profitability. The combination of profit growth, high execution rates for capital expenditures, and initial steps into renewable ownership reflects a shift towards a more resilient utility model capable of navigating future challenges.
As EPS enters 2026, it does so with strengthened retained earnings, enhanced internal financing capabilities, and a clearer strategic vision for its operations. The performance in 2025 not only highlights financial recovery amidst adversity but also signals a broader repositioning of Serbia’s power utility towards a more balanced and investment-oriented energy system ready for transition.
