Power group Tauron on reported an unexpected 23.7% decline in Q4 net profit due to provisions related to employee costs as well as higher labor costs, Tauron’s annual report showed.

Tauron posted an attributable net profit of PLN 191.9 million in Q4 2012, missing the consensus estimate of PLN 284.6 million according to the report.

"Group's financial result was lowered by almost PLN 99 million due to a one-off of increased reserves for employee pegs," CFO Krzysztof Zawadzki said.

Revenues of PLN 6.53 billion increased 16.8% y/y and were largely in line with consensus. Costs rose at a slightly slower pace of 15% y/y, resulting in a better margin on sales. Operating profit of PLN 308 million was down 5% y/y and way below consensus for PLN 410 million.