Montenegro’s state firms diverge in 2025 as energy losses deepen and restructuring gains traction

Montenegro’s state-controlled corporate sector is showing a clear divide: some businesses are stabilizing after years of financial strain, while the energy complex is still absorbing major shocks tied to the country’s aging coal-fired infrastructure. Financial reports published through the Montenegro Stock Exchange for 2025 point to an uneven recovery pattern that investors are likely to watch closely as the electricity mix continues its slow transition.

Rehabilitation and Plantaže lead the turnaround

The strongest improvement signals came from the rehabilitation sector and from long-troubled wine producer Plantaže. Institut Simo Milošević, a rehabilitation operator, posted net profit of approximately €6.5 million—its second consecutive profitable year after earlier years of financial distress. Revenues rose to around €15.8 million, supported by stronger patient volumes and revised reimbursement pricing agreements with Montenegro’s Health Insurance Fund.

The company also recorded extraordinary income from selling a former children’s department building to the state, which plans to convert the site into a new school facility in Igalo. That combination helped reduce accumulated historical losses from roughly €29 million to around €21.7 million, reinforcing the view that restructuring measures begun in recent years are starting to stabilize operations.

Plantaže showed a similar stabilization trend, remaining profitable for a second consecutive year while continuing to reduce debt burdens built up during earlier governance and liquidity crises. The recovery stands out because only a few years ago its shares were placed under enhanced market supervision following severe criticism from state auditors and concerns about corporate governance practices.

Energy losses reflect prolonged thermal outage and import costs

By contrast, Montenegro’s energy sector delivered one of its weakest financial performances in recent memory. State utility Elektroprivreda Crne Gore (EPCG) recorded a net loss of approximately €92 million after the country’s coal-fired thermal power plant stayed offline for more than eight months during reconstruction works.

The outage forced EPCG to import about 1,341 GWh of electricity worth approximately €142 million at market prices substantially above regulated domestic retail tariffs. As a result, total EPCG revenues fell to around €397 million, while operating expenses surged to approximately €466 million due largely to high-cost imports. The loss wiped out previously accumulated retained earnings and pushed EPCG into negative accumulated equity territory by year-end.

Even so, first-quarter 2026 figures already point to a rapid rebound. After the restart of the thermal power plant and improved hydrological conditions, EPCG returned to profitability with approximately €36.4 million in net income during the first three months of 2026—effectively offsetting much of the previous year’s accumulated deficit and restoring positive retained earnings.

The coal producer Rudnik uglja Pljevlja was also affected by the thermal plant outage, reflecting how tightly Montenegro’s coal mining and power generation are linked operationally. Together, EPCG and Rudnik uglja Pljevlja generated combined losses approaching €100 million during 2025.

Grid operator profits hold up despite tariff changes

Grid operator Crnogorski elektroprenosni sistem (CGES) maintained positive performance despite the broader energy disruption. It reported profits of approximately €21 million, though this was below prior-year levels after Montenegro’s energy regulator reduced transmission-related tariff components for the 2025–2026 regulatory period.

Tourism recovery remains uneven

In tourism, results were mixed rather than uniformly improving. Ulcinjska rivijera modestly improved profitability through operations centered on Ada Bojana. Budvanska rivijera, however, saw a sharp earnings decline as tourism revenues softened and sales income weakened compared with an exceptionally strong previous year.

A structural divide inside Montenegro’s state-owned sector

Taken together, the reports highlight a broader structural split within Montenegro’s state-owned economy. Tourism-linked assets undergoing restructuring appear gradually stabilizing after balance-sheet pressure, while energy remains highly exposed—both to generation concentration risk and hydrological volatility—and to the cost of maintaining aging thermal infrastructure amid efforts to diversify electricity supply over time.