Impressive Performance in Interim Report
AB “Ignitis grup?” (the Group) has published its interim report for the first nine months of 2024, showcasing a strong financial performance that reflects continuous growth. Adjusted EBITDA reached EUR 397.0 million, marking a significant increase of 15.0% year-over-year. This impressive growth is attributed to the robust performance in the Green Capacities and Networks segments, underscoring the Group's commitment to sustainable energy solutions.
Investment in Green Capacities
The Group allocated EUR 583.7 million towards various projects, with EUR 335.2 million or 57.4% specifically directed to the Green Capacities segment. Notably, new onshore wind farms in Lithuania accounted for a major portion of this investment. A staggering 85.4% of total investments were made in Lithuania, demonstrating the Group's dedication to enhancing its renewable energy capabilities.
Strong Financial Metrics
In terms of leverage, the Group's financial metrics remain exceptionally robust. The Funds from Operations (FFO) to Net Debt ratio improved to 34.2%, compared to 29.4% at the end of 2023. Furthermore, S&P Global Ratings reaffirmed the Group’s credit rating at ‘BBB+’, with a stable outlook, indicating strong investor confidence.
Expansion of Green Capacities Portfolio
In nine months of 2024, the Group expanded its Green Capacities Portfolio to 7.7 GW, up from 7.1 GW, and increased its Installed Capacity to 1.4 GW from 1.3 GW. The Secured Capacity also grew from 2.9 GW to 3.1 GW. Such growth reflects the Group's strategic efforts in developing its portfolio in renewable energy.
Development Milestones Achieved
Several significant milestones were achieved in the expansion of the Green Capacities Portfolio: the Group, in partnership with CIP, successfully acquired the second seabed site (Liivi 1) in the Estonian offshore wind tender. This site complements the Liivi 2 seabed site secured in December 2023.
In Poland, the Silesia WF I (50 MW) has commenced operations, achieving Commercial Operation Date (COD). Additionally, the Vilnius CHP biomass unit in Lithuania reached full COD of 71 MWe and 170 MWth. Similar progress was noted with the Taurag? SF (22.1 MW) in Lithuania achieving COD.
The Group also took decisive steps towards future growth, including a Final Investment Decision for the Tume SF (174 MW) in Latvia and commencing power supply from the Kelm? WF (300 MW) in Lithuania and Silesia WF II (137 MW) in Poland. Land has been secured for developing hybrid wind and solar projects in Latvia, showcasing the innovative approach the Group is taking.
Investment Plans and Regulatory Submissions
In the Networks segment, the updated 10-year Investment Plan (2024-2033) was submitted to the regulator for public consultation. This revised plan anticipates a 40% increment in investments to EUR 3.5 billion from a previously submitted Draft of EUR 2.5 billion for 2022–2031.
Furthermore, the regulator has determined income levels for 2025, projecting EUR 321.6 million for electricity distribution and EUR 57.1 million for natural gas distribution. The resolutions regarding the levels for RAB, WACC, and additional tariff components for 2025 have also been ratified.
Customers & Solutions Initiatives
In the Customers & Solutions area, the ongoing expansion of the electric vehicle (EV) charging network in the Baltics is noteworthy, with 867 EV charging points installed, showing growth of 491 since the end of 2023.
Environmental Impact and Sustainability Measures
The Group's Green Share of Generation stood at 83.6%, albeit a decrease of 5.4 percentage points YoY, which can be linked to a proportionally higher output from Combined Cycle Gas Turbines (CCGT). GHG emissions in Scope 2 saw a reduction of 34.5%; however, emissions in Scope 1 and Scope 3 increased by 21.1% and 12.9% respectively compared to the same period last year.
Total emissions reached 4.39 million t CO2-eq, witnessing a 19.7% increase year-over-year. The carbon intensity of Scope 1 & 2 GHG emissions decreased by 23.5% YoY to 270 g CO2-eq/kWh, primarily driven by greater electricity generation from renewable sources.
Shareholder Returns and Future Outlook
In accordance with the Dividend Policy, the Group distributed a dividend of EUR 0.663 per share for the first half of 2024, equating to EUR 48.0 million. Following this strong performance in the Green Capacities segment, the Group has raised its full-year 2024 Adjusted EBITDA guidance to EUR 480–500 million, updated from the previous EUR 450–480 million. Investment guidance for 2024 has also been revised to EUR 750–900 million from EUR 850–1,000 million due to timing effects of Green Capacities Investments.
Key Financial Indicators Analysis
Key financial indicators reflecting the overall performance include an increased Adjusted EBITDA of EUR 397.0 million compared to EUR 345.3 million a year earlier. The Green Capacities and Networks segments showed significant increases of 17.2% and 28.7%, respectively, in their contributions to EBITDA.
Frequently Asked Questions
What factors contributed to Ignitis Group's increased EBITDA?
The increase in Adjusted EBITDA was primarily driven by better performance in the Green Capacities and Networks segments, reflecting the Group's strategic focus on renewable energy.
How did Ignitis Group invest in Green Capacities?
The Group invested EUR 335.2 million in Green Capacities, focusing mainly on new onshore wind farms and expanding its operational efficiency.
What key developments occurred in the Green Capacities Portfolio?
Significant milestones included new offshore wind tenders, COD achievements for various wind farms, and investments in hybrid projects, demonstrating growth in renewable capabilities.
What is the outlook for Ignitis Group in 2024?
The updated Adjusted EBITDA guidance for 2024 is now set between EUR 480–500 million, with a revised investment forecast of EUR 750–900 million.
How has Ignitis Group addressed sustainability challenges?
The Group is actively reducing GHG emissions and increasing its renewable generation share, while also investing in electric vehicle infrastructure to enhance sustainability initiatives.
