Elektrėnai, Lithuania, 2015-08-31 08:00 CEST (GLOBE NEWSWIRE) --
LIETUVOS ENERGIJOS GAMYBA INCOME GROWS IN FIRST SIX-MONTH PERIOD, COMPANY OPERATES MORE EFFICIENTLY
The results of Lietuvos Energijos Gamyba (hereinafter referred to as “the Company”) and Lietuvos Energijos Gamyba group of companies (hereinafter referred to as “the Group”) for the period from January to June 2015:
- The sales income of the Company for the period from January to June 2015 amounted to EUR 98.03 million and was 6.2% higher than that in January – June 2014. The total income grew 15% and reached EUR 107.37 million.
- The Company’s EBITDA (earnings before interest, taxes, depreciation and amortisation) for the period from January to June 2015 amounted to EUR 28.33 million, a 17.5% decrease from the EBITDA recorded in January – June 2014 (EUR 34.33 million). The Company’s EBITDA margin in January – June 2015 reached 26.4%.
- In January – June 2015, the Company earned EUR 21.66 million as profit before tax. The Company’s net profit amounted to EUR 19.26 million and was 14% lower than that for the same period in the previous year (EUR 22.39 million). The net profit margin of the Company amounted to 17.9% (in the previous year – 24.0%).
- The sales income of the Group increased by 11.2 % (to EUR 103.63 million), while the total income of the Group dropped 2.4% (to EUR 112.40 million).
- The Group’s EBITDA (EUR 30.28 million) was 14.7% lower than the EBITDA for the same period in the previous year (EUR 35.52 million). The Group’s EBITDA margin dropped by 3.9% and amounted to 26.9% in January – June 2015.
- The Group earned EUR 15.71 million as profit before tax, while the net profit of the Group amounted to EUR 13.06 million (54.9% less than in January – June 2014).
Comments on the results from the Company management:
The results for January – June 2015 differ from the preliminary unaudited results of the Company announced on 14 August 2015: the indicators of the income, EBITDA, and net profit are lower. It was caused by accounting in the financial statements for January – June 2015, following the recommendations of the Company’s auditor, for the decisions of the National Commission for Energy Control and Prices (hereinafter referred to as “the NCC”) on the results of the examination of the Company’s activities in 2010-2012 and acknowledging the Company as having significant influence on the electricity production market. As a result of these decisions, reduced regulated prices were established for the Company for 2015. In January – June 2015, it cut the EBITDA and net profit by EUR 6.89 million and EUR 6.0 million, respectively. The impact of these decisions was not accounted for in the financial information for January – March 2015 as well as in the announced preliminary results for January – June 2015.
The Company considers as unfounded all the decisions of the NCC related to the aforementioned examination of the regulated activities and acknowledging the Company as having significant influence on the electricity production market and challenges them in court. If the impact of these decisions was discounted, the EBITDA for the period from January to June 2015 would have amounted to EUR 35.22 million, i.e. 2.6% more than in January – June 2014. Therefore, the Company has maintained a stable operating result over the year.
“We have sought and will seek our activities to be evaluated justly, with regard to actual market conditions and provisions of effective legal acts and previously adopted regulatory decisions. The Company trades in electricity on a power market and applies great effort to remain competitive in the regional market. In the meanwhile, we are improving our operating efficiency, seeking to contribute to the common goal of the whole nation – to reduce the burden of subsidies on consumers as much as possible and to maintain the optimal security of electricity supply”, says Juozas Bartlingas, the Company’s board chairman and general director.
In order to decrease the need for PSO funds and optimise operating costs, in the beginning of 2015 the Company decommissioned the first and second backup power plant units. In June completed the construction of a new biofuel boiler house, which will contribute to the production of heat for the population of Elektrėnai and infrastructure of the town at a more affordable price. The Company as well implemented related structural changes, and continued the optimisation of service functions – transferred the labour relations administration function to a service company of the Group.
“All these decisions helped to reduce operating costs and improve processes. At the same time, we paid much attention to producing electricity necessary to ensure supply security at an optimal price and assuring faultless operation of equipment. A bigger quota allowed producing the whole amount of supported electricity at the effective combined-cycle unit, owing to which the cost of a kilowatt of electricity produced at Elektrėnai during these six months decreased by approximately a quarter compared to the first half-year period of 2014, while accidents or major equipment failures in this period were avoided completely”, says Bartlingas.
The amounts of electricity produced by the Company in January – June 2015 increased by 54% compared to the same period of 2014 – from 0.596 TWh to 0.919 TWh. It was the biggest contributor to the growth of the Company’s income.
In January – June 2015, the income from the regulated activities which, by the Company’s estimate, include electricity and heat production at Elektrėnai Complex and Kruonis Pumped Storage Hydroelectric Plant (Kruonis PSHP) and power reserving services provided by Elektrėnai Complex, amounted to EUR 60.6 million, i.e. 38.1% more than in the same period of 2014. It accounted for 54% of the total income of the Group for the reporting period (compared to 38% in the same period of last year).
The share of the regulated activities in the income of the Company increased owing to the fact that this year, under an agreement with the transmission system operator, electricity is uninterruptedly generated at Elektrėnai Complex from mid-April in order to ensure energy supply security during the warm season. By the end of June, the Complex produced 0.445 TWh of electricity, i.e. 3.4 times more than in January – June 2014 (0.130 TWh).
The Company considers electricity production at Kruonis PSHP and Kaunas Algirdas Brazauskas Hydroelectric Power Plant (Kaunas HPP) as well as wholesale and retail sales of electricity in the free market and other commercial services as its commercials activities. In January – March 2015, production at Kruonis PSHP increased by 12.4% from the same period of last year (0.300 TWh and 0.267 TWh, respectively). However, the income from commercial activities dropped 27.4% (from EUR 71.2 million to EUR 51.7 million) as a result of decreased production at Kaunas HPP and lower sales of the Company in the free market.
A decrease of 12.5% (to 0.175 TWh) in the production volumes of Kaunas HPP was caused by dry weather and a low water level in the Nemunas River. The change in sales in the free market (from 0.803 TWh to 0.593 TWh, a decrease of 26.2%) resulted from structural changes in the electricity trade portfolio. After joining the derivatives market NASDAQ OMX Commodities in 2014, the Company has been increasing trade in derivatives (mostly, contracts for price difference) rather than trade in physical electricity.
Lietuvos Energijos Gamyba, AB is listed on NASDAQ OMX Vilnius Stock Exchange. 96.13% of its shares are owned by the state-controlled company Lietuvos Energija, UAB.
On 31 March 2015, the Company transferred the shares of Energijos Tiekimas UAB and UAB Kauno Energetikos Remontas held by Lietuvos Energijos Gamyba group of companies to Lietuvos Energija, UAB.
Valentas Neviera, Head of Corporate Communication Division at Lietuvos Energijos Gamyba, AB, phone +370 670 25997, e-mail valentas.neviera@le.lt
