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Ignitis Gamyba intensively increased electricity production in the first half of the year

Company News

 Despite the difficult times, the Company has shown impressive growth in electricity generation in the first 6 months of this year. Between January and June of 2020, the power plants managed by the Ignitis Gamyba produced and sold as much as 835 GWh of electricity, i.e. similar to the volume produced in 2019 on a full-year basis.

Principally, such a result is the merit of efficient utilisation of the potential of Kruonis PSHP and intensive production of the combined cycle unit (CCU) in the Elektrėnai Complex. Due to the favourable market conditions for the efficient operation of the CCU, the generation capacity of this facility reached 336 GWh (or 67 times more compared to the same period in 2019) during I half of 2020 and was highest among all the capacities managed by the Company.

Another important and significantly higher indicator is approx. 18 GWh of activated secondary power reserve services provided by Kruonis PSHP in January–June 2020, i.e. 2 times the volume reached in the same period in 2019.

“The first six months of 2020 will be long remembered, for the lockdown as well for the particularly difficult situation in the market that we faced in June. After the unexpected shut-down of two Riga cogeneration power plants and the failure of the electricity connection with Sweden NordBalt, most of the electricity demand in Lithuania was provided by the CCU, Kaunas Hydro Power Plant and Kruonis PSHP, which ensured almost 73% the country’s electricity demand. After being confronted with unexpected challenges, the importance of the Company’s capacity and the Company’s role as a reliable partner ensuring the security of the country’s energy system became more pronounced”, says Rimgaudas Kalvaitis, CEO of Ignitis Gamyba.

Key financial indicators of Ignitis gamyba were stable in the first half of this year. Compared to the same period in 2019, the Company’s revenue from contracts with customers increased by 1.8% up to EUR 67.4 million. The Company’s adjusted EBITDA increased by 3.9%.

In the field of green energy, one of the biggest news this half of the year was the opening of a 1 MW solar power plant which was installed by the Company in May. This power plant became the first remote solar park in the country, which marked the beginning of operation of the platform „Ignitis solar parks“ in practice, i.e. the opportunity given to all Lithuanian residents to generate electricity for their own apartments or houses in remote solar power plants. In addition, this solar park will be expanded in early autumn by opening a new 3 MW solar power planti n Obeniai. By finalising this project there will be established the largest solar power plant in the Baltic States.

The other projects also made significant progress in the first half of 2020. Already this summer, Ignitis Gamyba has started the dismantling of two disused chimneys in the Elektrėnai Complex. This is a unique project, and in light of Company‘s knowledge, no demolition work has been carried out in the Baltic States at such a height so far. According to the plan, the dismantling of these chimneys will be completed by autumn 2021.

“Looking to the second half of 2020, we will further pursue the work and projects started. When considering the possible development of Kruonis PSHP, we already had the results of the technological and socio-economic feasibility studies of the 5th hydro unit, which revealed the cost and benefit of the most attractive technological alternatives until 2050. Another stages in the project will depend on the electricity market and the demand for system services in the country in the future. Another development project of Kruonis PSHP is the installation of a floating solar power plant in the upper basin. We expect finalise the first stage of this project in the II half of 2020 by installing an experimental 60 kW power plant“, comments R. Kalvaitis.

Key performance indicators of Ignitis Gamyba for January-June 2020:

  • The Company’s revenue from contracts with customers totalled EUR 67.4 million in January-June 2020 and increased by 1.8%, in comparison with January-June 2019 (EUR 66.2 million).
  • The adjusted EBITDA* in January-June 2020 was 30.3 million euros, and thus, increased by 3.9 percent, if compared with the same period in 2019. The Company’s adjusted EBITDA grew due to the efficient use and higher production capacity of the Kruonis Pumped Storage Power Plant and the Elektrėnai Complex, which offset the lower production at the Kaunas HPP and the one-off effect of fuel oil and scrap metal sales in 2019, which improved the results.
  • Net profit reached EUR 14.9 million, 47.7% less if compared to January-June in 2019 (EUR 28.4 million).
  • Expenses incurred by the Company in the first half of 2020 amounted to EUR 49.8 million ­– expenses for purchasing electricity and related services as well as purchasing fuel for electricity generation accounted for the majority of it. Operating expenses amounted to EUR 13.5 million, i.e. EUR 3.3 million more if compared to H1 of 2019, mainly due to the increase in the cost of the Emission Trading Systems reappraisal that was affected due to the increased production of the KCB; and due to the effect of reversal of impairment losses (EUR 1.1 million) that was recognised in the first half of 2019.
  • In January-March 2020, the Company invested EUR 1.1 million in non-current tangible and intangible assets, while this investment in January-March 2019 was EUR 0.3 million.

* The Company’s adjusted EBITDA 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.

Attachment:
Ignitis Gamyba interim financial statements and interim report for 6 months of 2020