Eesti Energia: Electricity Production Increased 18% in 2Q
OREANDA-NEWS. August 06, 2013. In the second quarter, Eesti Energia’s turnover reached EUR 215 million, which is 22% more than in the same period last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were EUR 72 million in the second quarter, which is 4% more that the year before. Net profit was established at EUR 43 million.
The 76-percent increase in net profit was a result of last year’s low comparison base caused by income tax expenses relating to the dividend payment during last year’s second quarter.
According to Margus Kaasik, Finance Director of Eesti Energia, business results were strong for the quarter. “Its most noticeable feature was a significant rise in the production and sales volumes of electricity. As levels were lower in the Nordic region’s hydro reservoirs in the second quarter of this year than they were last year, the exchange price remained higher when compared to last year. Because of this, combined with the high demand for electricity in the Baltics, we produced electricity in the amount of 2416 GWh, which is 18% more than last year,” stated Kaasik.
While the sale price of electricity and its production volume increased, then when compared to the second quarter of last year, electricity’s EBITDA decreased both as a result of a lesser sales margin (- EUR 12 million) and an increase in fixed costs (-EUR 10 million). The main reason for the decrease in sales margin was the increase in CO2 costs, and the increase in fixed costs was, among other things, caused by the larger volume of repair works conducted. No profit was made from electricity sales to private consumers in Estonia, which accounts for 5% Eesti Energia’s turnover.
Compared to the year before, the sales price of liquid fuels has dropped 2%, similar to the price of petroleum products on the world market. Shale oil was produced in the amount of 37 000 tonnes, which is comparable to last year’s second quarter (40 000 tonnes). The decrease was a result of the timing of annual major repairs. The amount of shale oil sold decreased 37% in the second quarter, dropping to 22 000 tonnes. The decrease in sales volume was the result of a large consignment being prepared for export. Oil that had accumulated in the quarter was realized at the beginning of the third quarter.
“Even though, as a result of the delay in the start-up of Enefit280, this year’s estimated oil production from the new plant will be smaller than expected, an increase in the production of electrical energy will help with the profitability. This is why we have not changed the outlook for 2013 and we are expecting, compared to last year, an increase in both sales revenue and in earnings before interest, taxes, depreciation, and amortization,” comments Kaasik on the outlook for the economic year.
Eesti Energia Group’s financial performance is the consolidated performance of its subsidiaries engaging in the production, distribution and sale of fuel, electricity, and heat, and in the provision of other services.