Financial Analysis of European Energy Companies

Konstantinos Leventakos (University of Piraeus)
Athanasios S. Dagoumas (University of Piraeus)


Energy union and climate stands as one of the priorities of the European commission, aiming at the provision of secure, environmentally friendly and affordable energy. European energy policy over the last two decades have reshaped energy markets challenging the profitability and viability of energy companies. The latter must prove flexible in their management, including diversification of their portfolio, proceeding on structural unbundling and extending their operations in new markets and regions. Scope of the paper is to assess the financial and liquidity performances of key European energy companies over the period 2008-2017. The focus of the analysis concerns liquidity, profitability, operational performance and capital structure. The analysis is carried out in key energy companies, selected to have an extended geographical representation. Results indicate that gas and oil companies have less risk compared to power companies, attributed mainly to debt exposure. The renewable sector, although underrepresented in the examined sample, implies potential for high profitability. The profitability of power companies is affected by the ownership of assets with low operating costs and by diversification of operations, including regulated network operations. Eastern European power companies are favored by the derogation of EU regulation, though provision of free emission allowances. 


European energy companies; Financial analysis; Energy policy

Full Text:



Van Damme E.. “Liberalizing the Dutch Electricity Market: 1998–2004”, TILEC Discussing Paper, 2005.

De Jong. J.J.. “The Third EU Energy Market Package. Are we Singing the Right Song”, CIEP Briefing Paper, The Hague, Clingendael International Energy Program, Briefing Paper, 2008.

OXERA.. “Energy market competition in EU and G7: forward projections, 2007–11”, Department for Business, Enterprise and Regulatory Reform, 2007.

Stuckey, J., White, D.. “When and when not to vertically integrate”, The McKinsey Quarterly, 1993, 3.

Haase N.. “European gas market liberalization: are regulatory regimes moving towards convergence?”, Oxford Institute for Energy Studies, 2008.

Jamasb T, Pollitt M.. Electricity market reform in the EU: review of progress toward liberalization & integration, The Energy Journal, 2005, 26: 11-41.

Tirole, J.. “The Theory of Industrial Organization, Cambridge (Massachusetts)”, The MIT Press, Fourteenth printing, 2003.

Sun M., Wang Y., Shi L., and Klemeš J.J.. Uncovering energy use, carbon emissions and environmental burdens of pulp and paper industry: A systematic review and meta-analysis, Renewable and Sustainable Energy Reviews, 2018, 92:823-833.

Zeng S, Nan, X., Liu, C., and Chen J.. The response of the Beijing carbon emissions allowance price (BJC) to macroeconomic and energy price indices, Energy Policy, 2017, 106:111-121.

Zeng S, Jiang, C., Ma, C., and Su, B.. Investment Efficiency of the New Energy Industry in China, Energy Economics, 2018, 70:536-544.

Dagoumas A., Perifanis T., and Polemis M.. An econometric analysis of the Saudi Arabia's crude oil strategy, Resources Policy, 2018, 59:265-273.

Perifanis T., Dagoumas A.. An econometric model for the oil dependence of the Russian economy, International Journal of Energy Economics and Policy, 2017, 7:7-13.


McKinsey & Company.. “Beyond the storm – value growth in the EU power sector”, McKinsey & Company, 2014.

Damodaran A.. “The cost of Capital”, Stern University, 2019.

Modigliani F., and Miller M.. The Cost of Capital: Corporation Finance and the Theory of Investment, The American Economic Review, 1958, 48: 261-97.

Brealey R., Myers S. and Allen F.. “Principles of Corporate Finance”, 13th Edition, Mc Graw Hill, USA, 2003.

European Central Bank Interest Rates.



  • There are currently no refbacks.
Copyright © 2019 Athanasios Dagoumas Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.