2016-11-30 08:45:01 CET

2016-11-30 08:45:01 CET


REGULATED INFORMATION

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Lietuvos energijos gamyba, AB - Interim information

Operating results of Lietuvos Energijos Gamyba, AB, for the nine-month period ended 30 September 2016 


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