Elektrėnai, Lithuania, 2016-03-29 08:45 CEST (GLOBE NEWSWIRE) -- On 29 March 2016 the Ordinary General Meeting of Shareholders of Lietuvos Energijos Gamyba, AB (company code 302648707, registered office at Elektrinės str. 21, Elektrėnai; the Company) approved the consolidated Annual Report of Lietuvos Energijos Gamyba, AB for the year 2015 and the consolidated and Lietuvos Energijos Gamyba, AB Annual Financial Statements for the year 2015, audited by “PricewaterhouseCoopers” UAB, the Company‘s auditor.
Performance results of the national electricity producer Lietuvos Energijos Gamyba of 2015 directly reflect significant decisions made by the regulator and the Company itself. The Company still seeks to annul the decisions of the regulator in court, meanwhile, decisions of the Company itself allow the refined production company to operate in a more competitive manner and reduce the burden of subsidies on consumers.
In 2015, the Company’s sales revenue totalled EUR 203.10 million and was 12.1 percent lower than sales revenue of 2014 (EUR 231.08 million). Pre-audited earnings before interest, taxes, depreciation and amortization of Lietuvos Energijos Gamyba amounted to EUR 50.27 million in 2015, and was 21.5 percent lower than EBITDA of 2014 (EUR 64.02 million). Negative change of indicators was determined by decisions of the National Commission for Energy Control and Prices (NCC) made back in 2014 on the results of inspection of the Company’s activities in 2010–2012 and the recognition of the Company as having a significant impact in the electricity production market. In light of such decisions, reduced prices of regulated services were set for the Company for 2015.
“We appealed these decisions in court as soon as they were adopted, and still are consistently defending our position in order to have the Company’s activities be evaluated correctly, given the actual market conditions, provisions of all applicable laws and previously adopted regulatory decisions”, - said Eglė Čiužaitė, Chair of the Board and Chief Executive Officer of Lietuvos Energijos Gamyba. According to her, the Company believes in favourable judicial outcome, however, it did not include this revenue in its financial reports of 2015 pursuant to auditor recommendations.
Having excluded the effects of the said decisions of the NCC, the Company’s revenue would be 7.8 percent greater in 2015, while its EBITDA would account for about EUR 66.2 million, which would be more than during the same period of 2014, regardless of the decreased scope of commercial electricity production. Respectively, EBITDA margin would account for 28.7 percent, which is 1.3 percentage points more than in 2014.
Year 2015 was record arid, therefore, production in Kaunas Algirdas Brazauskas' Hydroelectric Power Plant decreased due to extremely low water levels in Nemunas. In 2015, this power plant produced 13.4 percent less electricity compared to 2014. Production volumes in Kruonis Pumped Storage Hydroelectric Plant remained the same as in 2014. Meanwhile, Elektrėnai complex, where electricity was produced with the aim to ensure supply security during the warm season, produced 24.4 percent more electricity than in 2014. Almost 2,007 TWh of electricity generated in power plants owned by the Company was sold during 2015. Compared to 2014, the produced electricity amount increased by 9.3 percent.
According to the Chief Executive Officer of the Company, other challenges, which Lietuvos Energijos Gamyba faced in 2015, were provided for in its strategy. “The energy market has been changing very rapidly, thus we reallocated our forces and set ourselves a task to increase the Company’s flexibility, reduce operational support costs and better adapt to market changes”, - said E. Čiužaitė and listed the major works performed. By separating electricity and heat production, the Company completed the construction of a new biofuel power plant in Elektrėnai and started decommissioning Units 1 and 2 of the reserve power plant in 2015. Refining its activities as a production company, it separated commercial electricity wholesale, while in the implementation of a strategic goal to reduce the need for services of public interest, the Board of Lietuvos Energijos Gamyba made a decision on the decommissioning of Units 5 and 6 as from the beginning of 2016.
The latter decision, which led to recognition of a one-time loss of EUR 30 million due to the impairment of non-current tangible assets and restoration of asset-related grants, had a negative impact on the company’s net result in 2015, thus the company incurred net loss of EUR 0.23 million in 2015 compared to its net profit of EUR 33.41 million in 2014.
It is important that the decommissioning of merely used production facilities, which are in poor technical condition and require high maintenance costs, allowed taking a large step in the implementation of the company’s strategic goals. First of all, this will help reduce the burden of subsidies on electricity consumers, and secondly, this will allow increasing the Company’s value focusing on the ensurance of reliability of facilities necessary for energy security, efficient exploitation thereof and increase of operational competitiveness.
In the preparation for 2016 - operations without a production quota in an even more changed market as a result of the emergence of new connections - specialists of the Elektrėnai complex owned by the Company adapted to working at the mode of ensurance of strategic reserve. Here, optimal capacities are exploited to ensure electricity demand, and heat energy is already produced from biofuel, while hydroelectric power plants continue generating competitive electricity.
“Last year, we sold shares of our subsidiaries and, in order to focus on efficient energy production, we sold a part of commercial electricity wholesale activities conducted by the company to Energijos Tiekimas, where the wholesale and retail electricity competence has been focused since the beginning of this year. Thus now Lietuvos Energijos Gamyba is the energy production company, which is flexible and open to changes seeking to implement its strategic goals, increase the value of the company and contribute to the fostering of welfare of all stakeholders”, - said the Head of the company.
Lietuvos Energijos Gamyba, AB is listed on NASDAQ OMX Vilnius Stock Exchange. 96.13% of its shares belong to the state-owned Lietuvos Energija, UAB.
On 31 March 2015, the company transferred the shares of Energijos Tiekimas UAB and Kauno Energetikos Remontas UAB, which belonged to Lietuvos Energijos Gamyba Group, to Lietuvos Energija UAB, thus the press release will comment solely the results of the company in the future.
Valentas Neviera, Head of Corporate Communication Division, tel. +370 670 25997, e-mail. valentas.neviera@le.lt
