CGES profit slips in Q1 2026 as revenue falls and costs rise

Montenegro’s electricity transmission system operator CGES said its earnings weakened in the first quarter of 2026, highlighting how revenue softness and cost pressure are affecting profitability for regulated infrastructure businesses. Net profit fell to €6 million from €7.7 million in the same period last year, according to the company’s latest reporting.

Revenue down, expenses up

CGES reported net sales of €23.6 million for the three months ended March 2026, an 8.9% decline compared with the first quarter of 2025. At the same time, operating expenses increased slightly—by 1.2%—to €17.3 million, narrowing the margin available to convert sales into earnings.

Balance sheet: assets decline, liabilities stable

Total assets decreased by 1.7% versus end-2025, reaching €369.2 million at the end of March 2026. Retained earnings were €125.9 million, reflecting accumulated profits from earlier periods.

On the liabilities side, CGES recorded long-term liabilities of €33.6 million and short-term liabilities of €20.2 million, suggesting a broadly stable structure with only a slight tightening in near-term obligations.

State-led ownership with regional transmission partners

CGES remains majority owned by Montenegro’s government, which holds 55% of shares. Italian transmission operator Terna owns a 22.09% stake, while Serbian transmission system operator EMS is also a strategic shareholder.

EMS entered CGES’s ownership structure in late December 2015 after acquiring about 10% of shares on the Montenegrin Stock Exchange for approximately €13.9 million. It later increased its holding in January 2021 by adding another 5%, further strengthening cross-border transmission cooperation ties.

The Q1 results matter for investors because they show how even modest movements in sales and operating costs can translate into lower bottom-line performance for an asset-heavy utility operator—particularly when profitability is already being tested by weaker top-line momentum.