Elektrėnai, Lithuania, 2016-11-30 08:45 CET (GLOBE NEWSWIRE) --
IN NINE MONTHS OF 2016, LIETUVOS ENERGIJOS GAMYBA INCREASED ITS PROFITABILITY AND DECREASED THE NEED FOR PS
In nine months of 2016, profitability indicators of Lietuvos Energijos Gamyba, the company having ensured stability of electricity supply, increased compared to the same period of 2015. EBITDA margin increased by 8.4 percentage points and reached 31 percent, net profit grew by 3.3 percentage point to 18.1%, which came as a result of increasing performance efficiency of the Company and profitable activities of hydro power plants.
The Company reduces its operating expenses by optimizing activities and giving up old inefficient facilities, which led to decreased costs of repair and maintenance. In 2016, a relatively greater share of works of dismantling of old electricity production facilities was conducted by the Company’s employees deliberately brought together in the arrangement works group. In previous years, contractors were usually hired for this purpose. At the same time, the Company has continuously reduced costs of business servicing (procurement, accounting) services.
“In September of 2016, we updated our business strategy distinguishing works of arrangement conducted in the Elektrėnai complex as a priority along with such priorities as reliable operation of power plant and development of new services. Our aim is to operate at the maximum possible efficiency, produce solely in state of the art facilities using less fuel, ensure that the maintenance of old inefficient facilities did not require consumer funds and the impact of our activities on the environment was minimum” - the Chair of the Board and Chief Executive Officer of Lietuvos Energijos Gamyba defined the guidelines of the key objectives.
In nine months of 2016, 0.308 TWh of electricity was produced in Elektrėnai. Compared to nine months of 2015, this is a three-times lower scope of production due to revoked quotas for subsidized electricity production, also having led to reduction of the Company’s revenues. Sales revenue of the Company in nine months of 2016 total EUR 100.9 million and are by 40 percent lower than revenues in the same period of 2015 (EUR 168.1 million).
Nevertheless, producing electricity in the gas combined cycle unit at the time when the price of electricity was the highest in the market, the Company contributed to the assurance of stability of electricity prices and at the same time earned about EUR 3.7 million on the exchange in nine months of 2016. Funds of public services (PS) allocated to the Company for 2016 should be reduced by this amount (EUR 25.1 million) which means direct benefit to each electricity consumer, because PS component is included in the electricity tariff.
In nine months of 2016, Kruonis Pumped Storage Plant owned by the Company produced 0.411 TWh of electricity, which is 15.5 percent less than in the same period of 2015, but the power plant operated more profitably. Meanwhile, Kaunas A Brazauskas’ Hydro Power Plant produced 0.257 TWh of electricity in nine months of 2016 due to a greater amount of water running in via the Nemunas river, which is by a fifth more than in the same period of 2015. Power plants owned by the Company produced a total of 0.977 TWh of electricity in nine months of 2016, which is by 40.9 percent less than in the same period of 2015.
With decreased scope of production, the Company’s profit also decreased; moreover, it was negatively affected by decisions of the National Commission for Energy Control and Prices (NCC) due to which a part of the Company’s profit (which totalled EUR 10.2 million in nine months of 2016 according to preliminary estimates) was designated for covering fixed costs of the Company incurred in the performance of the regulated activity.
EBITDA of nine months of 2016 is EUR 31.6 million (compared to EUR 39.2 million in the same period of 2015). Having excluded the impact of the NCC decisions, according to preliminary estimates, the Company’s EBITDA of nine months of 2016 was EUR 13 million greater (the impact of these factors in the same period of 2015 was EUR 10.7 million).
Decreased market prices of emissions allowances (EA) and recognized loss of EUR 6.8 million for EA and the change of the value of the accounted right to receive EA significantly affected net profit of the Company, which amounts to EUR 22 million (compared to EUR 26.5 million in nine months of 2015).
Valentas Neviera, Lietuvos Energijos Gamyba, AB, Head of Corporate Communications Division, tel. +370 670 25997, e-mail: valentas.neviera@le.lt
