Elektroprivreda Srbije closed 2025 with a materially stronger financial result, confirming a structural turnaround in Serbia’s largest energy company despite a year marked by adverse natural conditions and internal transformation. Net profit reached approximately €360 million, representing an increase of around €150 million year on year, achieved under circumstances that would traditionally have compressed margins and weakened balance-sheet performance.
The operating backdrop in 2025 was unusually challenging. Serbia experienced one of the weakest hydrological years in more than three decades, significantly reducing output from hydroelectric facilities, which remain a critical component of the national generation mix. Low water inflows along major river systems constrained production at both reservoir and run-of-river plants, increasing system stress and forcing greater reliance on thermal generation to meet demand.
At the same time, EPS underwent a substantial workforce transition. Around 1,000 employees retired during the year, primarily affecting mining operations and maintenance-intensive segments of the system. While this process is expected to reduce long-term fixed costs and improve organisational efficiency, it created short-term operational bottlenecks that added to production pressure during an already difficult hydrological cycle.
Despite these constraints, EPS maintained system stability and avoided excessive exposure to high-priced electricity imports. Increased utilisation of thermal power plants and tighter operational coordination allowed the company to compensate for reduced hydro output while keeping variable costs under control. This operational resilience was a key contributor to the profit increase, alongside improved internal cost discipline and more rational capital allocation compared with the pre-2023 period.
A notable structural milestone in 2025 was EPS’s entry into direct ownership of variable renewable energy assets. For the first time, the company commissioned 76 MW of new wind and solar capacity, marking a strategic shift toward portfolio diversification. While modest in scale relative to total installed capacity, this addition signals a clear change in EPS’s long-term generation strategy, positioning renewables as an integrated component rather than an external supplement to the system.
Investment activity remained robust throughout the year. Total capital expenditure reached RSD 52.7 billion, equivalent to roughly €450 million, representing 97% of the planned annual investment programme. Crucially, most of this CAPEX was financed internally, reflecting a strengthened cash-generation profile and reduced dependence on external borrowing. Spending focused on maintaining thermal fleet reliability, environmental upgrades, and preparatory works for large-scale energy transition projects.
Among those forward-looking projects is a planned solar and battery storage complex of approximately 1 GW, scheduled to move into construction phases from 2026 onward. The ability to advance such a project from internal resources underscores the balance-sheet improvement achieved over the past two years and highlights a growing capacity to fund capital-intensive assets without undermining financial stability.
From a structural perspective, the 2025 results indicate that EPS is no longer operating in a purely reactive mode driven by hydrology and fuel availability. Instead, the company demonstrated an ability to absorb external shocks, manage internal restructuring, and still deliver higher profitability. The combination of profit growth, high CAPEX execution rates, and first steps into owned renewables suggests a shift toward a more resilient and investment-capable utility model.
As EPS entered 2026, it did so with stronger retained earnings, improved internal financing capacity, and a clearer strategic direction. The 2025 performance therefore stands not only as a record of financial recovery under adverse conditions, but as evidence of a broader repositioning of Serbia’s power utility toward a more balanced, capital-disciplined, and transition-ready energy system.
