Lietuvos Dujos - Interim information

Cleared-up and more efficient activities allowed Lietuvos Dujos to achieve better results in 2014

Unaudit preliminary performance results of AB Lietuvos Dujos for 2014 twelve
months 

Vilnius, Lithuania, 2015-02-27 15:12 CET (GLOBE NEWSWIRE) -- Compared to 2013,
sales revenues of the natural gas distribution activity continued by the
Lithuanian natural gas distribution system operator AB Lietuvos Dujos increased
by 16 percent during 12 months of 2014 and amounted to LTL 188.2 million (EUR
54.5 million) (in 2013: LTL 161.9 million (EUR 46.9 million)). The increase in
revenue was determined by increased distribution service prices set upon the
start of the new 2014-2018 regulatory period. 

Expenses of the Company's, which is operated by the state owned energy company
group Lietuvos Energija, continued gas distribution activity decreased by 53
percent, or LTL 193.6 million (EUR 56.1 million), compared to 2013 and
accounted for LTL 172.1 million (EUR 49.8 million). After the elimination of
the impairment expenses of non-current assets, expenses totalled LTL 150.4
million (EUR 43.6 million) in 2014 and were 10 percent lower than expenses in
2013 (LTL 166.4 million (EUR 48.2 million)). Due to the impairment of
non-current assets accounted for as at 31 December 2013 in retrospect,
depreciation expenses decreased by 30 percent in 2014. Cost of natural gas also
decreased significantly due to a lower natural gas import price. 

Earnings before interest, taxes, depreciation and amortization (EBITDA) of the
continued gas distribution activity increased by LTL 32 million (EUR 9.3
million), or 84 percent, in 2014 and amounted to LTL 70.1 million (EUR 20.3
million) compared to LTL 38.1 million (EUR 11 million) in 2013 (EBITDA
calculations do not evaluate the impairment of non-current assets). This change
was caused by better distribution activity results determined by decreased
expenses and increased revenue. 

In 2014, net profit of the Company totalled LTL 146.2 million (EUR 42.3
million) (in 2013, the Company incurred net loss of LTL 106.2 million (EUR 30.8
million), including net profit of the continued activity accounting for LTL
20.3 million (EUR 5.9 million) (compared to net loss of LTL 166.9 (EUR 48.3) in
the same period last year)). Net loss of the continued activity incurred in
2013 was determined by the above-specified impairment of non-current tangible
assets. Having eliminated the impact of the impairment of non-current assets,
net profit of the continued gas distribution activity in 2013 and 2014 would
amount to LTL 2.6 million (EUR 0.8 million) and LTL 38.7 million (EUR 11.2
million), respectively. 

Net profit of the discontinued gas supply activity conducted for 10 months of
2014, including the result of the sale of gas supply activity, totalled LTL 126
million (EUR 36.5 million) (last year, net profit of the discontinued gas
supply activity was LTL 50.7 million (EUR 14.7 million), and net profit of gas
transmission activity totalled LTL 10 million (EUR 2.9 million)). 

Upon the change of the accounting policy in accordance with the policy applied
in Lietuvos Energija, UAB Group on 31 December 2014, a part of the Company's
non-current tangible assets was accounted for in application of the revaluation
method. A part of asset revaluation results was reflected under other
comprehensive income, which totalled LTL 17 million (EUR 4.9 million) in 2014. 

“Upon the change of gas business environment occurred in recent time in
Lithuania, Lietuvos Dujos, having cleared up its activities as the gas
distribution system operator, took a natural step into the reorganization stage
of the company. The aim of the changes in the company is to create and
establish a long-term partnership with customers, create an appealing service
package, enhance customer confidence in natural gas, which has once again
become a competitive fuel due to its decreasing price”, - said Liudas
Liutkevičius, Chairman of the Board and CEO of AB Lietuvos Dujos. 

Having unbundled the natural gas supply and distribution activities at the end
of 2014, household customers and a major part of non-household customers have
been paying for gas to gas supply companies, which in turn have paid the
distribution system operator Lietuvos Dujos for the provided gas distribution
service. Major non-household customers - gas system users continue paying for
the gas distribution service to Lietuvos Dujos. 

In 2014, AB Lietuvos Dujos transported via its distribution system 747.8 MCM of
natural gas, which is 12.7 percent less than in 2013. AB Lietuvos Dujos
operates 8.5 thousand km of distribution gas pipelines supplying gas to more
than 560 thousand customers. Gas distribution volumes decreased last year due
to a warm winter season and the development of biofuel used for the production
of district heat. “Since the volume of the distributed natural gas has
decreased over the past few years, distribution system maintenance costs have
been distributed over a lower volume of distributed gas, which led to
significantly increasing gas distribution tariff. In order to be able to
increase the consumption of natural gas at the lowest possible cost, we will
seek to exploit the already developed infrastructure and give due attention to
the customers, whose connection to the existing infrastructure would be simple
and cost-effective”, - said Liudas Liutkevičius. 

In 2014, investments of the continued gas distribution activity of the Company
amounted to LTL 40.1 million (EUR 11.6 million), which is 18 percent less than
in 2013. Lower investments into the reconstruction of the gas network and
modernization were made last year, however, investments related to the
construction of new gas systems connecting new customers increased
significantly, i.e. by 31 percent. In 2014, 49 percent of funds were invested
into the construction objects of new gas systems, 50 percent was allocated for
investments into the reconstruction of gas systems, modernization and
reliability projects, while the remaining part comprised investments into
financial assets. 

“We are moving forward step by step - during 2014, we connected to the gas
distribution system 15 percent more new gas customers, however, this is just a
start. This year we have set specific goals related to the attraction of new
customers and densification of our network. The more gas is consumed, the less
infrastructure maintenance will cost for customers”, - said Liudas
Liutkevičius. Gas prices is calculated to have decreased by one-third to
household customers over the period of two years, while a fee for connecting to
the distribution system decreased by half in the past four years. 

The shares of Lietuvos Dujos are quoted on the Main List of the stock exchange
NASDAQ OMX Vilnius. Lietuvos Energija, UAB owns 96.6% of shares of the company
and minority shareholders have acquired the remaining part of shares (3.4%)
thereof. 


         Laura Šebekienė
         Head of Communications
         Ph. +370 633 99940
         Email: l.sebekiene@lietuvosdujos.lt

Attachments:

Lietuvos Dujos performance results for 2014 Q4.pdf