Eesti Energia Group Reports Steady Performance in Q2 2025
Sales Revenues and Profitability
Eesti Energia Group faced a challenging environment in the energy market, witnessing a decline in electricity and oil prices. For Q2 2025, the company reported sales revenue totaling EUR 388 million. Meanwhile, the EBITDA fell to EUR 80 million, with adjusted EBITDA at EUR 83 million. The net profit for the quarter was reported as EUR 30 million, with an adjusted net profit reaching EUR 33 million.
Impact of Market Conditions
This quarter's performance reflects the adverse effects of falling shale oil and electricity prices. It is noteworthy that Baltic energy prices have reverted to pre-energy crisis levels as seen prior to 2022. The previous quarter had benefited considerably from one-off CO?-related gains, which positively influenced the financial results. In contrast, Q2 2025 has shown a return to normalcy, resulting in diminished profitability compared to Q2 2024. However, the ‘Other' segment—particularly frequency services—displayed robust growth in revenue and EBITDA.
Adjusted EBITDA and adjusted net profit calculations exclude temporary fluctuations in the fair value of long-term Power Purchase Agreement (PPA) derivatives, which helps in achieving better period-to-period comparability.
Comments from CFO Marlen Tamm
Marlen Tamm, CFO of Eesti Energia, remarked, "The financial results for this quarter were chiefly influenced by fluctuations in the energy marketplace. Our newly established wind and solar parks have enabled us to generate a greater amount of renewable energy compared to the previous year, thus contributing to lower electricity prices and benefiting consumers. However, the decline in market prices translates to reduced revenues for energy companies, which inhibits future investments, including developing new generation capacities."
Tamm continued, "The current decline in prices, along with significant price fluctuations, has become the new normal within the energy sector, a trend we expect to persist in the years ahead. In light of these circumstances, energy companies need to innovate and adapt. That's why Eesti Energia has initiated the formation of an integrated energy group combining renewable energy, dispatchable generation, battery solutions, and a diversified customer portfolio, thus enhancing our competitiveness in the evolving market environment."
Renewable Generation and Electricity Sales Segment
This particular segment experienced a 26% year-on-year decline in sales revenue, bringing it down to EUR 170 million. However, the production of renewable electricity surged by 27% to 0.6 TWh, attributed largely to new wind farms, including the Sopi-Tootsi facility, which added 255 MW of capacity compared to last year. On a less favorable note, retail electricity sales volumes decreased by 7% to 2.1 TWh.
Non-Renewable Electricity Production
In contrast, sales revenue from non-renewable electricity increased by 6% year-on-year, totaling EUR 37.1 million. Generation in this segment rose by 2% to 0.3 TWh, primarily due to the continued outage of the EstLink2 transmission cable, necessitating an uptick in domestic generation. The cable, severely damaged, had previously disrupted approximately 650 MW of transmission capacity between Estonia and Finland but was successfully reconnected this month.
Despite an increase in revenue, the segment’s EBITDA declined significantly, dropping by EUR 18 million due to rising CO? costs and increased fixed costs alongside lower derivative gains.
Distribution Segment Performance
On a more positive note, sales revenue from the distribution segment rose by 9% to EUR 73.7 million, aided by higher tariffs and an added 2% increase in distributed volumes. Planned outages decreased, and network losses improved significantly; however, unplanned outages sustained low levels, maintaining operational uptime.
Shale Oil Segment Overview
The shale oil segment's sales revenue dropped by 17% to EUR 43 million, primarily due to a 15% decline in sales volumes and a 20% fall in the average sales price. Nonetheless, effective hedging strategies mitigated some of the potential losses, as they protect against downside risks while retaining upside potential, especially in a backwardation market.
Investments and Future Outlook
Capital expenditure for the group reached EUR 120 million in Q2 2025, reflecting a 43% decrease from the previous year. The majority of this investment was centered on nearly finished renewable energy projects, including a significant allocation to the Kelme wind farm, expected to commence production shortly.
As of the latest update, Eesti Energia holds EUR 619 million in liquid assets, with total available liquidity at EUR 1,019 million. Key financing developments also unfolded with substantial equity injection from the government and an equity stake increase in Enefit Green AS. Furthermore, the company’s current credit ratings remain stable, having recently received considerable attention from credit rating agencies.
Frequently Asked Questions
What was the sales revenue of Eesti Energia in Q2 2025?
Eesti Energia reported sales revenue of EUR 388 million in Q2 2025.
How did the EBITDA change compared to Q2 2024?
The EBITDA in Q2 2025 decreased to EUR 80 million compared to the previous year's results.
What factors influenced the decrease in profitability?
The primary catalysts for reduced profitability include falling shale oil and electricity prices.
What is the outlook for Eesti Energia in the coming years?
Management anticipates that sales revenue and EBITDA will closely align with the results of 2024, while capital expenditures are predicted to decline.
What is the significance of renewable generation for Eesti Energia?
Renewable generation has become increasingly integral, supporting sustainability initiatives and benefiting consumer electricity pricing.
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