Riga, 2015-05-22 14:22 CEST (GLOBE NEWSWIRE) -- In the first quarter of 2015, Latvenergo Group successfully retained its leadership in electricity supply in the Baltics. We have increased the number of customers in neighbouring countries by more than 10%. Overall, retail electricity supply in the Baltics reached 2,132 GWh. The amount of electricity supplied in Lithuania and Estonia was 645 GWh, which is by 60% higher than the amount provided by competing electricity traders in Latvia.
On 1 January 2015, the electricity market opening for households in Latvia took place. Despite the competition, most households in Latvia have chosen to keep Latvenergo as their electricity supplier.
Latvenergo Group power plants generated 1,027 GWh of electricity and 1,019 GWh of thermal energy in the first quarter of 2015. The amount of electricity generated at Daugava hydropower plants (Daugava HPPs) has increased by 5% compared to the respective period last year, reaching 739 GWh. However, output of electricity at the Riga combined heat and power plants (Riga CHPPs) in the first quarter of 2015 was 42% lower compared to the first quarter of 2014, reaching 273 GWh due to lower electricity prices on the market. Riga CHPPs operated in the market conjuncture, efficiently planning their operating modes and fuel consumption.
In the first 3 months of 2015, Latvenergo Group income constituted 259.5 million euros and profit was 39.3 million euros (first three months of 2014: 324.5 million euros and 30.8 million euros respectively). Decrease in Latvenergo Group revenue was determined by change in accounting principles along with Enerģijas publiskais tirgotājs AS entrance into operation as of 1 April 2014. Therefore, mandatory procurement revenues are no longer recognised in the revenue. Improvement of profitability, in turn, were due to opening of the electricity market to households in Latvia as of 1 January 2015. Until that, Latvenergo Group supplied households at the regulated tariff that was below the market price.
Total investments in the 3 months of 2015 amounted to 24.8 million euros. To maintain high-quality network services, technical performance indicators, and operational reliability, significant investments were made in modernising the network. Investment in network assets accounted for 80% of all investments in the first 3 months of 2015. A significant portion of investments were also allocated to environmentally friendly and environmental improvement projects. After the reporting period, in 2015, an agreement with the European Commission Innovation and Networks Executive Agency was concluded regarding to the final stage of the Kurzeme Ring project, Ventspils–Tume–Rīga, stipulating 45% EU co-funding of eligible project costs. Within the framework of the Daugava HPP hydropower unit reconstruction programme, an agreement was concluded on reconstruction of six hydropower units at the Riga HPP. As part of its plan to attract borrowed capital and diversify Latvenergo Group borrowing sources, Latvenergo AS is planning to implement a new bond offering programme totalling up to 100 million euros. The bonds are planned to be included in the NASDAQ OMX Baltic Bonds List.
In early 2015, the Moody’s Investors Service international credit rating agency upgraded the Latvenergo AS credit rating to Baa2 with a stable outlook.
Next interim financial statements of Latvenergo Group in 2015 will be published on 31 August and 30 November.
[1] EBITDA – earnings before interest, taxes, depreciation and amortisation.
Key Performance Indicators
Operational Figures
| Q1 2015 | Q1 2014 | ||
| Retail electricity supply | GWh | 2,132 | 2,487 |
| Electricity generation | GWh | 1,027 | 1,192 |
| Thermal energy supply | GWh | 0,990 | 1,077 |
| Number of employees | 4,142 | 4,567 | |
| Moody's credit rating | Baa2 (stable) | Baa3 (stable) |
Financial Figures
| Q1 2015 | Q1 2014 | ||
| Revenue | MEUR | 259.5 | 324.5 |
| EBITDA 1) | MEUR | 94.8 | 82.5 |
| Net profit | MEUR | 39.3 | 30.8 |
| Assets | MEUR | 3,526.8 | 3,598.0 |
| Equity | MEUR | 2,059.4 | 2,050.1 |
| Net debt2) | MEUR | 688.6 | 679.7 |
| Investments | MEUR | 24.8 | 27.5 |
Financial Ratios
| Q1 2015 | Q1 2014 | ||
| Net debt /EBITDA 3) | 2.8 | 2.5 | |
| EBITDA margin 4) | 26% | 24% | |
| Capital ratio 5) | 58% | 57% |
1) EBITDA: earnings before interest, corporate income tax, share of profit or loss of associates, depreciation and amortisation, and impairment of intangible and fixed assets
2) Net debt: borrowings at the end of the period minus cash and cash equivalents at the end of the period
3) Net debt / EBITDA: net debt to EBITDA ratio (12-month rolling)
4) EBITDA margin: EBITDA / revenue (12-month rolling)
5) Capital ratio: total equity / total assets
Consolidated Statement of Profit or Loss*
For the 3 months ended 31st of March 2015
| 01/01–31/03/2015 | 01/01–31/03/2014 | |
| EUR'000 | EUR'000 | |
| Revenue | 259,506 | 324,495 |
| Other income | 1,199 | 1,128 |
| Raw materials and consumables used | (127,615) | (204,164) |
| Personnel expenses | (22,578) | (23,528) |
| Depreciation, amortisation and impairment of property, plant and equipment | (43,702) | (43,798) |
| Other operating expenses | (15,698) | (15,398) |
| Operating profit | 51,112 | 38,735 |
| Finance income | 694 | 751 |
| Finance costs | (4,959) | (5,132) |
| Share of profit / (loss) of associates | – | (329) |
| Profit before tax | 46,847 | 34,025 |
| Income tax | (7,591) | (3,251) |
| Profit for the period | 39,256 | 30,774 |
Consolidated Statement of Financial Position*
| 31/03/2015 | 31/12/2014 | |
| EUR'000 | EUR'000 | |
| ASSETS | ||
| Non–current assets | ||
| Intangible assets and property, plant and equipment | 3,059,314 | 3,079,327 |
| Investment property | 1,345 | 1,343 |
| Non–current financial investments | 41 | 41 |
| Investments in held–to–maturity financial assets | 28,513 | 28,528 |
| Other non–current receivables | 12 | 14 |
| Total non–current assets | 3,089,225 | 3,109,253 |
| Current assets | ||
| Inventories | 25,032 | 22,560 |
| Trade receivables and other receivables | 261,890 | 233,752 |
| Cash and cash equivalents | 150,656 | 121,011 |
| Total current assets | 437,578 | 377,323 |
| TOTAL ASSETS | 3,526,803 | 3,486,576 |
| EQUITY | ||
| Share capital | 1,288,446 | 1,288,446 |
| Reserves | 645,181 | 645,829 |
| Retained earnings | 118,174 | 79,995 |
| Equity attributable to equity holders of the Parent Company | 2,051,801 | 2,014,270 |
| Non–controlling interests | 7,608 | 6,531 |
| Total equity | 2,059,409 | 2,020,801 |
| LIABILITIES | ||
| Non–current liabilities | ||
| Borrowings | 709,719 | 688,297 |
| Deferred income tax liabilities | 273,884 | 268,026 |
| Provisions | 14,546 | 15,588 |
| Derivative financial instruments | 12,870 | 11,698 |
| Other liabilities and deferred income | 195,221 | 194,474 |
| Total non–current liabilities | 1,206,240 | 1,178,083 |
| Current liabilities | ||
| Trade and other payables | 122,858 | 139,912 |
| Borrowings | 129,581 | 138,925 |
| Derivative financial instruments | 8,715 | 8,855 |
| Total current liabilities | 261,154 | 287,692 |
| Total liabilities | 1,467,394 | 1,465,775 |
| TOTAL EQUITY AND LIABILITIES | 3,526,803 | 3,486,576 |
*Unaudited Interim Condensed Consolidated Financial Statements. Prepared in accordance with the IFRS as adopted by the EU
Additional information:
Jānis Irbe
Group Treasurer
Phone: +371 67 728 239
E-mail: investor.relations@latvenergo.lv
About Latvenergo
Latvenergo Group is a pan-Baltic energy company, engaging in electricity and thermal energy generation and supply, electricity distribution services and management of transmission system assets. Latvenergo Group holds one-third of the entire Baltic electricity market, thus ensuring its leadership in the Baltic electricity supply. Latvenergo AS has been acknowledged as the most valuable company in Latvia for several years in a row. International credit rating agency Moody’s has assigned Latvenergo AS an investment-grade credit rating of Baa2/stable.
Latvenergo Group includes the parent company Latvenergo AS (electricity and thermal energy generation and supply) and its subsidiaries Latvijas elektriskie tīkli AS (management of transmission system assets), Sadales tīkls AS (electricity distribution), Elektrum Eesti OÜ (electricity supply in Estonia), Elektrum Lietuva UAB (electricity supply in Lithuania), Enerģijas publiskais tirgotājs AS (administration of electricity mandatory procurement process) and Liepājas enerģija SIA (electricity and thermal energy generation and supply), as well as Elektrum Latvija SIA (electricity supply), a subsidiary of Elektrum Eesti OÜ.
