Baltic utilities report mixed results for 2017

08 March 2018, Week 09, Issue 900

Energy suppliers in the Baltic States posted varied financial results for 2017, with Latvia’s Latvenergo announcing one of its best years yet, Estonia’s Eesti Energia reporting a plunge in profits and Lithuania’s Lietuvos Energija’s performance remaining stable.

In its unaudited report for the year, Latvenergo said last week it had turned a profit of 322.2 million euros (US$397 million), versus 130.6 million euros (US$161 million) in 2016. The bump in income was largely because of a 149.1 million euro (US$239 million) tax rebate, although the company’s EBITDA also rose by 38% to 541.7 million euros (US$668 million). This was despite revenues remaining virtually unchanged on 2016, at 925.6 million euros (US$1.14 billion).

The group’s net debt stood at 590.8 million euros (US$728 million) at the end of December, some 2.8% less than a year earlier. Capital investment was up over 21%, at 243.8 million euros (US$301 million).

In a statement, Latvenergo also pointed to a 22% rise in power generation last year to 5.734 million MWh, driven by 74% growth in output at hydroelectric power plants (HPPs) along the River Daugava. This likely led to a drop in per-unit costs, although Latvenergo did not disclose its expenses in 2017.

Latvenergo also noted it had begun trading gas to customers in Latvia and Estonia in April, following deregulation of the country’s gas market in line with EU standards.

Eesti Energia, meanwhile, saw its audited profit for last year slide by 41% to 100.8 million euros (US$124.3 million), despite a 1.6% uptick in revenues to 753.9 million euros (US$930 million). The company’s EBITDA slumped by 19.3%, arriving at 264.2 million euros (US$328 million).

Earnings were supported by a growth in the company’s shale oil production of 24.4%, while the sales price of this oil climbed by 4.8%. This was countered by weak numbers from Eesti’s electricity business, which saw EBITDA slide by 16.8% because of higher fixed costs and a lower sales price. These factors more than offset a rise in its power generation to a record 9.7 million MWh.

On the upside, Eesti’s net debt fell to 582.4 million euros (US$722 million) at the end of 2017, from 717 million euros (US$889 million) a year earlier. Cash and cash equivalents stood at 298.7 million euros (US$370 million), versus 223.3 million euros (US$277 million) at the end of 2016.

Finally, Lietuvos Energija’s performance last year was little changed on 2016, with adjusted EBITDA up 1% at 236 million euros (US$293 million) on revenues of 1.096 billion euros (US$1.359 billion), down 1%. The company reported a 5% drop in operating expenses to 130 million euros (US$161 million). Its net profit totalled 128 million euros (US$159 million), up 9% year on year.

Joseph Murphy

Edited by

Joseph Murphy

Editor

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