2015-11-27 15:00:08 CET

2015-11-27 15:00:08 CET


REGULATED INFORMATION

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Lietuvos energijos gamyba, AB - Interim information

Operating results of "Lietuvos energijos gamyba", AB, Group for the nine-month period ended 30 September 2015 


Elektrėnai, Lithuania, 2015-11-27 15:00 CET (GLOBE NEWSWIRE) -- 

IN JANUARY–SEPTEMBER, “LIETUVOS ENERGIJOS GAMYBA” ACHIEVED BIGGER AND MORE
EFFECTIVE GENERATION 

  -- In January–September 2015, “Lietuvos energijos gamyba” generated revenue
     from sales amounting to EUR 168.06 million, or 7.2% smaller than in the
     same period in 2014.
  -- 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, Elektrėnai 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 Elektrėnai
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 Elektrėnai 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 Elektrėnai 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
Elektrėnai 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. 


"Lietuvos energijos gamyba", AB is listed on NASDAQ OMX Vilnius Stock Exchange.
96.13% of its shares belong to the state-controlled “Lietuvos energija”, UAB. 

On 31 March 2015, the Company transferred the shares of Energijos tiekimas UAB
and Kauno energetikos remontas UAB, which belonged to "Lietuvos energijos
gamyba" Group, to “Lietuvos energija” UAB. 


         Valentas Neviera, Head of Corporative Communication Division of
Lietuvos Energijos Gamyba, AB, phone 8 670 25997, email valentas.neviera@le.lt