The energy producer Lietuvos Energijos Gamyba published its audited performance results of Half 1 of 2016. Changes in the market led to decreased revenues of the Company compared to Half 1 of 2015. Still, the Company’s profitability indicators and the benefits rendered to consumers have significantly increased.
In Half 1 of 2016, the Company generated EUR 89.3 million in revenue, which is 16.8 percent less than in Half 1 of 2015. The decrease of revenues was mainly affected by the fact that quotas for subsidized electricity production, including in the Elektrėnai complex owned by the company, have no longer been allocated since 2016. It resulted in decreased production in Elektrėnai, which was 63.4 percent lower (Half 1 of 2015 – 0.445 TWh, Half 1 of 2016 – 0.163 TWh), and a decline in revenues.
Nevertheless, the Company exploited capacities of the Elektrėnai complex to the maximum considering the situation in the market – with the production of electricity in efficient combined cycle unit (CCU) and successful sale thereof on the exchange, about EUR 1.3 million in gross profit was earned. This amount respectively reduces the budget allocated for the Company to ensure the provision of public services, which renders direct benefit to each electricity consumer, because the public service obligation (PSO) component has been included in electricity tariff.
“During Half 1 of this year alone, combined cycle unit in Elektrėnai was launched twice as much as in the whole last year. We have successfully exploited this powerful facility both contributing to the assurance of stability in electricity system and seeking for the maximum return for shareholders and value for all electricity consumers” - said Eglė Čiužaitė, Chair of the Board and CEO of Lietuvos Energijos Gamyba.
Thus, commercially successful CCU activities in Half 1 of 2016, compared to Half 1 of 2015, production in Kaunas Algirdas Brazauskas' Hydroelectric Power Plant having grown by 15.8 percent (from 0.175 TWh to 0.203 TWh) as a result of increased amount of water in Nemunas and responsible management of operating costs led to the fact that regardless of the reduction of the overall income level, the Company’s profitability indicators grew.
Compared to the data of Half 1 of 2015, the Company’s EBITDA margin in Half 1 of 2016 increased by 2.9 percentage points to 31 percent. EBITDA of the Company was EUR 21.7 million (compared to EUR 28.3 in Half 1 of 2015). Based on resolution of the National Commission for Energy Control and Prices (NCC), the share of profit from commercial activities of Kruonis PSHP and Kaunas HPP for Half 1 of 2016 – a total of EUR 9.2 million – was directed for covering fixed costs of the Company incurred in the performance of regulated activities providing PSO. Having excluded effects of NCC decisions currently appealed in courts, according to preliminary estimates, the Company’s EBITDA in Half 1 of 2016 would have been EUR 11.1 million greater (in Half 1 of 2015 effects of these factors totalled EUR 6.9 million).
The Company’s profit earned during Half 1 of 2016 can be used to cover EUR 10.5 million of PSO funds, which is almost 38 percent of all PSO funds allocated for the Company in 2016 approved by the NCC.
Net profitability of the Company increased from 17.9 percent (in Half 1 of 2015) to 19.9 percent during the year. Net profit in Half 1 of 2016 was EUR 17.8 million (compared to EUR 19.3 million in Half 1 of 2015). Sale of the wholesale electricity trade business share had a significant possible effect thereon. If it wasn’t for significantly decreased market prices of emission allowances (EA), the Company’s profit would have been even greater and would have exceeded last year’s profit by a third. However now a loss of EUR 7.9 million as a result of the changed value of EA and accounted right to receive EA had to be reflected in financial statements of Half 1 of 2016.
Half 1 of 2016 was outstanding not in Elektrėnai alone. Kruonis PSHP also calculates that this year its emergency reserve was activated much more often than usually, with the amount of electricity getting into Lithuania having suddenly decreased. “Upon the launch of new interconnections and change of the market, a very important function of our power plants, namely, provision of instant help to electricity system and a significant contribution in the assurance of its stability, became apparent. I am glad that our professional employees managed to quickly adapt to market changes and ensure that we were able to assure stable, reliable and most efficient electricity supply”, – said the CEO of Lietuvos Energijos Gamyba.