Unaudited results of Latvenergo Group for the first quarter of 2016

In the first quarter of 2016, Latvenergo Group revenue constitutes 263.5 million euros, which is by 2% more than in the first three months of the previous year. EBITDA[1] of the Group has increased by 6% reaching 100.1 million euros. The revenue and EBITDA have increased in all operating segments of the Group. The Group profit in the first quarter of 2016 constitutes 38.6 million euros. The amount of electricity generated by the Group has increased significantly, reaching 1,236 GWh, which is by 20% more than in the respective period of the previous year. The operative and efficient operation of Riga CHPPs on the electricity market has precluded electricity price increase risk. The total amount of investment in the first three months of 2016 constitutes 34.7 million euros, which is by 40% more than in the previous year.


Riga, 2016-05-31 15:00 CEST (GLOBE NEWSWIRE) -- In the first quarter of 2016, Latvenergo Group has successfully maintained the leading electricity supplier position in the Baltics. The number of business customers in the neighbouring countries has increased by more than 1,700 customers, compared to the first quarter of the previous year. The retail electricity supply outside Latvia has constituted in total 646 GWh (gigawatt-hours), which is approximately one third of the total retail electricity supply – 2,144 GWh (in the first quarter of 2015 – 2,132 GWh).  

In the first quarter of 2016, Latvenergo Group power plants have generated 1,236 GWh of electricity and 1,173 GWh of thermal energy. The amount of generated electricity is increased by 20%, compared to the respective period in the previous year. The amount of electricity generated by Riga combined heat and power plants (Riga CHPPs) has increased significantly, being in the first quarter of 2016 by more than two times higher than in the first quarter of the previous year and reaching 620 GWh.  Favourable conditions for power generation at Riga CHPPs were fostered by the average price decline of the natural gas by 24%, compared to the respective period in the previous year. The operative and efficient operation of Riga CHPPs ensured for electricity consumption in situations of limited import from abroad, thus precluding electricity price increase risk. Whereas significantly lower water inflow in Daugava determined the decrease by 19% compared to first quarter previous year in the amount of electricity generated by Daugava hydropower plants (Daugava HPPs), which constituted 601 GWh in the first quarter of 2016.

In the first three months of 2016, Latvenergo Group revenue constitutes 263.5 million euros and profit – 38.6 million euros (in the first three months of 2015 – 259.5 million euros and 39.3 million euros respectively). The profit was mainly positively influenced by lower natural gas price, whereas negatively – by the decrease in the amount of electricity generated by Daugava HPPs. In the first quarter of 2016, the EBITDA margin has improved to 33%, whereas in the respective period of the previous year it constituted 26%.

The total amount of investment in the first three months of 2016 constitutes 34.7 million euros, which is by 40% more than in the respective period of 2015. Nearly 70% of the total investment was made into network assets. A substantial part of investment was made in environmentally friendly and environmental development projects – in the first three months of 2016, 8.4 million euros were invested in the reconstruction of Daugava HPPs hydropower units. The ambitious project, which involves gradual overhaul of hydropower units, is scheduled to be completed until 2022, with the total reconstruction costs exceeding 200 million euros. As of 31 March 2016, the completed workload within the contract reached  59.9 million euros. After completion of reconstruction works, the total capacity and amount of electricity generated by Daugava HPPs will increase, ensuring operation of hydropower units for further 40 years.

In February 2016, the international rating agency Moody’s Investors Service reconfirmed the credit rating of Latvenergo AS, determining it Baa2 with a stable future outlook.

After the end of the reporting period, on 14 April, 2016, Latvenergo AS issued additional green bonds in the amount of 25 million euros, thereby completing the second bond offering programme in the amount of 100 million euros. The total amount of bonds represents more than 1/5 of the total amount of borrowings.

Next interim statements of Latvenergo Group of 2016 will be published on 31 August and 30 November.

[1] EBITDA – earnings before interest, corporate income tax, share of profit or loss of associated companies, depreciation and amortisation, and impairment of intangible and fixed assets

   

Key Performance Indicators

Operational Figures

    Q1 2016 Q1 2015
Retail electricity supply GWh 2,144 2,132
Electricity generation GWh 1,236 1,027
Thermal energy supply GWh 1,131 990
Number of employees   4,181 4,142
Moody's credit rating   Baa2 (stable) Baa2 (stable)

 

Financial Figures

    Q1 2016 Q1 2015
Revenue MEUR 263.5 259.5
EBITDA 1) MEUR 100.1 94.8
Net profit MEUR 38.6 39.3
Assets MEUR 3,607.5 3,526.8
Equity MEUR 2,133.4 2,059.4
Net debt2) MEUR 657.7 688.6
Investments MEUR 34.7 24.8

 

Financial Ratios

    Q1 2016 Q1 2015
Net debt /EBITDA 3)   2.1 2.8
EBITDA margin 4)   33% 26%
Capital ratio 5)   59% 58%

 

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-months rolling)

4) EBITDA margin: EBITDA / revenue (12-months rolling)

5) Capital ratio: total equity / total assets 

 

Consolidated Statement of Profit or Loss*

For the 3 months ended 31 March 2016

  01/01–31/03/2016 01/01–31/03/2015
  EUR'000 EUR'000
     
Revenue 263,533 259,506
Other income 1,566 1,199
Raw materials and consumables used (125,182) (127,615)
Personnel expenses (24,456) (22,578)
Depreciation, amortisation and impairment of property, plant and equipment (52,459) (43,702)
Other operating expenses (15,315) (15,698)
Operating profit 47,687 51,112
Finance income 654 694
Finance costs (3,756) (4,959)
Profit before tax 44,585 46,847
Income tax (6,023) (7,591)
Profit for the period 38,562 39,256

 

Consolidated Statement of Financial Position*       

  31/03/2016 31/12/2015
  EUR'000 EUR'000
ASSETS    
Non–current assets    
Intangible assets and property, plant and equipment 3,072,843 3,090,661
Investment property 739 696
Non–current financial investments 41 41
Investments in held–to–maturity financial assets 17,071 20,609
Other non–current receivables 1,711 1,712
Total non–current assets 3,092,405 3,113,719
     
Current assets    
Inventories 23,409 24,791
Trade receivables and other receivables 304,358 266,460
Investments in held-to-maturity financial assets 11,382 7,859
Cash and cash equivalents 175,979 104,543
Total current assets 515,128 403,653
TOTAL ASSETS 3,607,533 3,517,372
     
EQUITY    
Share capital 1,288,531 1,288,531
Reserves 667,504 669,596
Retained earnings 169,345 131,662
Equity attributable to equity holders of the Parent Company 2,125,380 2,089,789
Non–controlling interests 7,970 6,913
Total equity 2,133,350 2,096,702
     
LIABILITIES    
Non–current liabilities    
Borrowings 749,416 714,291
Deferred income tax liabilities 272,576 273,987
Provisions 16,197 15,984
Derivative financial instruments 10,539 8,291
Other liabilities and deferred income 198,647 196,386
Total non–current liabilities 1,247,375 1,208,939
     
Current liabilities    
Trade and other payables 132,243 121,256
Borrowings 84,235 83,192
Derivative financial instruments 10,330 7,283
Total current liabilities 226,808 211,731
Total liabilities 1,474,183 1,420,670
TOTAL EQUITY AND LIABILITIES 3,607,533 3,517,372

* - 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

www.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 (lease 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.

 


Attachments

02_Latvenergo_Interim_2016_Q1_presentation_ENG.pdf 01_Latvenergo_Interim_2016_Q1_ENG.pdf