Lietuvos energijos gamyba releases operating results for the nine-month period
- Company's EBITDA (earnings before interest, taxes, depreciation and amortisation) in January–September 2015 amounted to EUR 39.19 million, and if compared with the EBITDA of the same period in 2014 (EUR 48.36 million) dropped down by 19.0%.
- Company's net profit was EUR 26.46 million, or 5.4% smaller than during the same period last year (EUR 27.96 million).
The major adverse impact on the figures of January–September 2015 was made by the decisions made by the National Commission for Energy Control and Prices (hereinafter – NCC) setting reduced regulated prices of services for the Company for 2015, which are currently contested in court.
- Sales revenue of “Lietuvos energijos gamyba” Group dropped by 5.1% (from EUR 182.91 million down to EUR 173.66 million).
- Group's EBITDA (EUR 37.16 million) were 23.9% smaller than EBITDA in the same period last year (EUR 48.86 million).
- Net profit of the Group was EUR 23.54 million (30.7% less than in the period of January–September 2014).
Summer months and early autumn have been marked by the biggest generation volumes for a couple of years in the units of “Lietuvos energijos gamyba”. This year is not an exception: for the whole third quarter, Elektr?nai combined cycle unit operated to great capacity and produced electricity needed to secure energy supply, while Kruonis pumped storage hydroelectric plant also generated bigger amounts of electricity and successfully used the chances on the market. Despite drastically decreased operating volumes of Kaunas Algirdas Brazauskas' hydroelectric power plant caused by dry year, the production of these two plants determined the total quantity of electricity generated in the power plants controlled by the Company to reach nearly 1,652 TWh in January–September 2015, which was nearly 13% bigger than in the same period last year.
'Such production output has positive impact on the financial results of the Company: if regulatory environment stayed stable, earnings and profit in January–September 2015 would be bigger than during the same period in 2014. But today we see that these indicators during nine months of this year significantly decreased if compared with the same period last year. The main reason for that is the decisions made by the regulator in 2014 causing decrease in the earnings from public service obligations (PSO) funds allocated for the Company and power reserve securing services', said Juozas Bartlingas, Chairman of Board and Chief Executive Officer of “Lietuvos energijos gamyba”.
A share of the Company's proceeds from the regulated activities is not recognised by the NCC's decisions regarding the Company's activity inspection results 2010–2012 and because of the recognition of the Company has having major influence on the electricity generation market. Following auditors' recommendations, the Company does not include these proceeds into the interim financial reports of 2015 but continues actively defending its position for their recognition, applying for abolition of the above-mentioned NCC's decisions in court. Having rejected the impact by these decisions, the EBITDA and net profit in January–September 2015 would be EUR 10,7 million and EUR 9,0 million bigger, respectively.
Following the long-term business strategy guidelines, the Company was further exerting measures to increase its efficiency and to reduce the burden of subsidies on its consumers. Electricity generation efficiency in Elektr?nai complex, which generated 0.953 TWh (which is nearly one quarter more supported electricity than during the same period last year (0.768 TWh), was about 9% bigger.
Throughout the period from mid-April, the combined cycle unit experienced reliable and stable operation, while in the beginning of October with electricity prices nearly doubling during certain hours in the Lithuanian price zone of Nord Pool Spot Exchange, the unit's generation was increased almost to the maximum. For some time, it operated as a plant competitive on the electricity market. 'On one hand, our main task is to secure uninterrupted electricity supply, which we are diligently fulfilling. On the other hand, the situation showed that next year, when no electricity generation quota for supported electricity in Elektr?nai will be set, the role of the latter power plan will not decrease: once a price jumps on the exchange, this plant will help to secure reliable power supply and stable electricity prices', the Company's Head was convinced.
Other important aspects in increasing Company's operating efficiency include: implementation of important projects, reduction of operating and service costs.
The Company is further proceeding with dismantling of the first and second unit of the standby power plant. In order to keep reducing the demand for PSOs, inefficient fifth and sixth units are planned to be decommissioned from 2016. Efforts are made to ensure that the most reliable and efficient equipment is operating in Elektr?nai complex: for electricity generation – seventh and eighth units of the standby power plant and combined cycle unit are used, for heat generation – the new biofuel boiler house constructed this year is used. The latter boiler house makes lower heating production price possible for Elektr?nai residents.
If comparing the Company's performance results in January–September 2015 with the performance results of the same period in 2014, the outcome of prioritising functions of procurement, accounting and employment relations administration is obvious, furthermore costs of lease, transport, public utilities and other services also experienced significant decrease.
'Such results are encouraging, but this is only the beginning. We are further looking for solutions which would ensure provision of quality services to our customers and would keep equipment in good technical condition and would sustain qualified staff, thus reducing operation support costs. Furthermore, in September we announced about our agreement to sell a share of our commercial wholesale electricity trade business from early 2016. Purifying our activities, we are focusing on energy generation, assurance of reliability of controlled power plants, increase of operating efficiency', Mr. Bartlingas emphasised the future prospects.