Lietuvos Energija, UAB (hereinafter – the Company), identification code 301844044, registered office placed at Žvejų St. 14, Vilnius, the Republic of Lithuania. The total nominal value of issued bonds 600 000 000 EUR; ISIN codes XS1646530565; XS1853999313.

Increased prices in international markets affected the results of Lietuvos Energija

During the four quarters of 2018, the financial results of the state-owned group of energy companies Lietuvos Energija (the Group) were significantly affected by the price situation in the electricity and gas markets. Due to price changes in the aforementioned markets, the Group‘s revenue amounted to EUR 1.266 million, which is 15.1% more if compared to EUR 1,100 million earned during Q1–Q4 of 2017. However, rising prices have also lead to an increase in the costs of purchasing electricity, gas, fuel and related services by 33.2%, up to EUR 986.6 million. Due to the specificity of the regulated activity, the Group’s costs increased more than revenue, and the regulatory differences will be compensated in the coming periods.

After eliminating regulatory effects, the Group’s adjusted EBITDA decreased slightly by 3.8% and totaled EUR 229.7 million, compared to EUR 238.7 million during Q1–Q4 of 2017.

In addition to the aforementioned changes in electricity and gas prices, the Group’s net profit result in 2018 was also significantly affected by the one-off item of fixed assets valuation of managed company Energijos Skirstymo Operatorius. Although, overall the valuation resulted in an increase of assets value, due to the accounting aspects in the income statement revaluation losses were accounted, which significantly decreased net profit result, the increase in value were accounted in the revaluation reserve in equity. After eliminating regulatory and one-off effects, the Group’s adjusted net profit decreased by 3.3% compared to 2017 and totaled EUR 125.8 million.

 “Last year has been full of challenges for Lietuvos Energija – the spikes in energy price in the international markets impacted Group's results, but we managed risks successfully and ended 2018 with the expected results. We continue to confidently implement the objectives set out in the LE 2030 strategy. Last year the Group's investments were record high, amounting to nearly EUR 410 million. We are expanding the green generation capabilities – in 2018, we acquired three operating wind farms, while the Smart Energy Fund, powered by Lietuvos Energija, invested in start-ups that will, without doubt, develop amazing solutions and show great results. This year we will continue to transform the Group by consolidating its activities and will focus on the client even more“, says Darius Maikštėnas, CEO and Chairman of the Board of Lietuvos Energija.

Key interim financial indicators of Lietuvos Energija Group for Q1–Q4, 2018:

• The Group’s revenue amounted to EUR 1.266 million, which is 15.1% more if compared to EUR 1.100 million earned during Q1–Q4 of 2017;
• Operating expenses amounted to EUR 127.6 million, which is 3.3% (or EUR 4 million) less, compared to EUR 132 million during Q1–Q4 of 2017. Lower operating expenses resulted from the improvement of operational efficiency;
• The Group‘s EBITDA decreased by 33.5% and totaled EUR 151.2 million. The Group’s adjusted EBITDA decreased by 3.8% and totaled EUR 229.7 million, compared to EUR 238.7 million during Q1–Q4 of 2017. The steady growth of the distribution activity results has been offset by the poorer performance of the electricity and gas trading activities, affected by  increased market prices;
• The level of the return on equity ratio was equal to 0.5% compared to 7% in 2017. The level of the adjusted return on equity ratio remained high and was equal to 9.4% compared to 9.8% in 2017;
• The Group‘s net profit decreased by 93.1% to EUR 6.5 million. The Group’s adjusted net profit amounted to EUR 125.8 million, which is 3.3% less compared to EUR 130.1 million during  Q1–Q4 of 2017;
• Investments amounted to EUR 409.2 million, which is 61.5% more compared to EUR 253.4 million during Q1–Q4 of 2017. Investments were mainly allocated for the maintenance (30%) and development (21%) of the electricity distribution network, also investments have increased significantly due to investments in cogeneration plants’ projects in Vilnius and Kaunas (20%).

*The Group’s EBITDA and net profit is adjusted (1) by eliminating deviation between actual and regulated revenue, by which the Group‘s future financial results will be adjusted; (2) by eliminating gas price discount expenses that are related to the previous periods. 

Artūras Ketlerius, Acting Head of Public Relations, arturas.ketlerius@le.lt, +370 620 76076

Attachments

• Certification Statement LE 2018 interim
• LE group 2018 interim consolidated financial statements
• LE group 2018 interim report