April 7, 2017 / 3:37 PM / 2 years ago

UPDATE 2-Greek utility PPC returns to profit as bad debt provisions fall

* Overdue bills surged in wake of Greek debt crisis

* Cash reserves to get a boost from completion of grid spin-off

* Sales fall as PPC cedes market share as part of Greek debt deal (Updates number of unpaid bills, customers in payments schemes)

By Angeliki Koutantou

ATHENS, April 7 (Reuters) - Greece’s main power utility Public Power Corp. (PPC) returned to profit last year thanks to a significant drop in provisions for bills left unpaid by austerity-hit Greeks during the debt crisis.

PPC, which is 51 percent state-owned and earmarked for a partial sale, has been hurt by overdue bills which have reached 2.2 billion euros ($2.3 bln) since the crisis broke out in 2010.

It reported a net profit of 67.5 million euros for 2016 on Friday, recovering from a 102.5 million euro loss in 2015.

The company has tried to recoup payments with phased repayment schemes. That helped provisions for overdue debt and litigation decline by more than half to 438 million euros last year.

PPC said 480,000 of customers who joined the schemes had settled debt of 790 million euros Still, the burden of unpaid bills had squeezed its cash reserves.

Greece’s energy ministry said on Friday that PPC’s cash reserves would be boosted by about 700 million euros next month when it completes the spin-off of its power grid operator ADMIE from PPC. PPC said it expects collection of bad debts to increase in the medium term.

The company will not pay a dividend for 2016. It did not pay one last year because it made a loss.

PPC, which has a 90 percent share of the retail market and 60 percent of the wholesale market, has to reduce this dominance to less than 50 percent by 2020 under Greece’s third, 86 billion euro bailout deal.

Sales dropped 8 percent to 5.2 billion euros last year, the company said, as it ceded market share. By the end of 2016 it had a 91.9 percent share of the market, down from 96.4 percent in 2015.

PPC wants to set up a portfolio of some of its customers’ accounts, which it would sell to smaller rivals to help open up the market further. ($1 = 0.9400 euros) (Reporting by Angeliki Koutantou; Editing by Jason Neely and Susan Fenton)

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