OREANDA-NEWS. The majority, or 81%, of total electricity retail supply was supplied on the open electricity market, while 19% were supplied at the regulated electricity tariff in Latvia. Latvenergo Group retail electricity supply in Latvia is 2,830 GWh, in Lithuania - 1,067 GWh, in Estonia - 694 GWh. The amount of electricity supplied in Lithuania and Estonia totals 1,762 GWh, which is 1,024 GWh more than the supply volume of competing electricity suppliers in Latvia.

Uldis Bariss, Chief Commercial Officer of Latvenergo AS: “Over the past half of the year, we have successfully moved towards our primary strategic goal of strengthening the market position in the Baltics. With the total electricity consumption in the Baltics decreasing by 4%, our electricity supply has increased by 5%. The number of customers in the neighboring countries exceeds 32 thousand, and it has increased almost threefold compared to the respective period last year. We will continue to work towards increasing the number of customers in the neighboring countries, primarily pursuing greater cooperation with business clients.”

In 1H 2014, the power plants of Latvenergo Group generated 2,111 GWh of electricity. The output at Daugava HPPs decreased by 35% reaching 740 GWh. This was caused by a lower water level in Daugava; meanwhile, the output at Riga CHPPs was 128 GWh lower than last year. The decrease was caused by relatively low electricity price on the exchange and relatively high natural gas price, as well as lower demand for thermal energy due to warmer weather conditions. In 1H 2014, Latvenergo Group produced 1,419 GWh of thermal energy, which is 12% less than in the respective period of 2013.

The revenue of Latvenergo Group was EUR 543.1 million in 1H 2014, while the profit - EUR 42.3 million (1H 2013: EUR 28.7 million). The change in profit was due to recognition of balanced mandatory procurement revenue and costs as opposed to EUR 26.3 million losses from the mandatory procurement operations in 1H 2013. If recognition of balanced mandatory procurement revenues and costs had been commenced at the beginning of 2013, the profits of Latvenergo Group would have decreased in 1H 2014. Results were negatively affected by 35% lower output at the Daugava HPPs and an increase in costs by EUR 7.7 million following the introduction of the Subsidized Electricity Tax at the beginning of the year. In 1H 2014, Latvenergo Group lost revenues due to electricity supply at the regulated tariff in Latvia were EUR 21.0 million (2013: EUR 44.2 million).

Latvenergo Group is one of the largest taxpayers in Latvia: in 1H 2014, the Group paid EUR 61.8 million in taxes to the State Budget, of which EUR 23.6 million were paid in dividends. Additionally, over the last five years, Latvenergo Group has paid more than EUR 500 million in taxes to the State Budget.

In 1H 2014, the total amount of investments was EUR 64.7 million. In order to improve the quality of network services and technical parameters, Latvenergo Group continues to invest in the network assets - the amount invested in the network assets exceeds 70% of the total investments in 1H 2014.

Currently, one of the most significant investment objects of Latvenergo Group is the Kurzeme Ring project, which is a part of the NordBalt international energy infrastructure development project. The total construction costs of the project are estimated at EUR 200 million, and the project is scheduled for completion in 2019. EUR 94.3 million have been invested in the project until mid-2014. In August 2014, construction of 330 kV project Kurzeme Ring transmission line connection Grobiņa-Ventspils has been completed, and it has been put in operation. The Kurzeme Ring is a qualitatively new electricity transmission line and a significant national energy sector project for Latvia.

In early 2014, the international credit rating agency Moody's Investors Service reconfirmed Latvenergo AS credit rating Baa3 with a stable outlook.

The unaudited interim condensed consolidated financial statements of Latvenergo Group for 9 months of 2014 will be published on 28 November 2014.