Ignitis Gamyba started to adopt its updated strategy last year and results of 2019 of the electricity producer, which is a part of Ignitis Group, show the Company improved its financial indicators and efficiently managed operating expenses.
Although the draught in spring and summer took its toll in Lithuania, the main performance indicators of Ignitis Gamyba in 2019 consistently improved. Results of Ignitis Gamyba in 2019 were significantly influenced by the effective use of the Kruonis Pumped Storage Power Plant (hereinafter “Kruonis PSHP”) potential, positive results of the stocked fuel-oil sales and increased volume of the regulated services provided by Elektrėnai Complex. That led to 20.5% higher adjusted EBITDA of the Company in 2019, which reached EUR 54.0 million (compared to EUR 44.8 million in 2018).
“The year 2019 for Ignitis Gamyba was full of challenges, but tackling them, we can enjoy both better company results and greater employee engagement today. We are changing and evolving as a company that seeks efficiently operate strategic electricity generation capacities and implement new energy projects“, says Rimgaudas Kalvaitis, chairman of the board and CEO at Ignitis Gamyba.
Hydrological drought and prolonged fish spawning period had a negative impact on the results of Kaunas A. Brazauskas Hydroelectric Power Plant (hereinafter “Kaunas HPP”) due to the following reasons: a low flow of the Nemunas inflow in 2019 it produced 0.27 TWh or 22% less electricity than in 2018. The lower production results of Kaunas HPP were compensated by the increased margin of Kruonis PSHP generation – the increased difference between daily peak and night-time electricity prices resulted in 14% higher sales of the electricity produced in Kruonis PSHP in 2019 (0.54 TWh). As in the year 2018, the production volumes in Elektrėnai Complex remained limited. In total, 0.83 TWh of electricity generated in the Company’s power plants was sold in the NordPool exchange in 2019, slightly less if compared to 2018 (0.88 TWh).
Implementing its essential mission, in 2019 the Company successfully provided various ancillary services that are vital to the stability and security of the region’s electricity supply systems. As in previous years, in 2019 the Company ensured the secondary active power reserve, a service provided by two hydro-units of Kruonis PSHP in the scope of 400 MW. The tertiary active power reserve in the scope of 260 MW was ensured by the most effective unit of Elektrėnai Complex – the combined cycle unit (hereinafter “the CCU”). CCU was constantly ready to produce electricity and contribute to the overall security of the energy system.
”I am glad we managed to make a substantial progress implementing new projects. In 2019, preparatory works for the installation of the experimental solar power plant in Kruonis PSHP and disassembly of the chimneys in Elektrėnai Complex have been actively carried out, including the initiation of the public procurement procedures necessary for further implementation of these projects. I strongly believe these large-scale innovations will soon become reality“, says R. Kalvaitis.
At the beginning of October, Ignitis Gamyba started providing solar power plant installation services and implementing large solar park projects for remote customers generating solar energy. The 1 MW solar power plant offered on the platform Ignitis Saulės Parkai was booked within 2 days. At the end of the year, a 3 MW solar farm development project was initiated.
At the end of the year, Ignitis Gamyba won the auction of the tertiary active power reserve, announced by the transmission system operator LITGRID (hereinafter “LITGRID” or “the TSO”), and signed a contract to provide this service. Under this agreement, the company will provide this vitally important service in 2020 ensuring power grid reliability to units 7 and 8 of Elektrėnai Complex within the scope of 475 MW. Since the launch of the auctions for tertiary active power reserve, this is the first case when one supplier is selected to provide all the services. Ignitis Gamyba has also signed agreement with LITGRID for provision of secondary reserve and services ensuring isolated operation of the power system in 2020. These services will be provided by two Kruonis PSHP units and the CCU and Unit 8 respectively.
Key performance indicators of Ignitis Gamyba of 2019*:
* Financial indicators of the Company for the year 2018 have been recalculated. Information about the changes is presented in the Company's interim financial information for the year ended 31 December 2019.
** The Company’s preliminary adjusted EBITDA for 2019 and actual adjusted EBITDA for 2018 are reported after the adjustments made by the management by eliminating the impact of one-off factors, also considering the change in revenue (and, consequently, EBITDA) of the Company's regulated services. These adjustments are made aiming to disclose the results of the Company’s operating activities after the elimination of the impact of non-typical, one-off factors or factors that are not directly related to the current reporting period. All adjustments made by the management are disclosed in the Company’s interim and annual reports.