Lietuvos energijos gamyba, AB - Interim information

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

Elektrėnai, Lithuania, 2016-08-31 16:00 CEST (GLOBE NEWSWIRE) -- LIETUVOS
ENERGIJOS GAMYBA ACHIEVED ADDITIONAL SAVINGS OF CONSUMER FUNDS OF EUR 10.5
MILLION IN HALF I OF 2016 

The energy producer Lietuvos Energijos Gamyba published its audited performance
results of Half 1 of 2016. Changes in the market led to decreased revenues of
the Company compared to Half 1 of 2015. Still, the Company’s profitability
indicators and the benefits rendered to consumers have significantly increased. 

In Half 1 of 2016, the Company generated EUR 89.3 million in revenue, which is
16.8 percent less than in Half 1 of 2015. The decrease of revenues was mainly
affected by the fact that quotas for subsidized electricity production,
including in the Elektrėnai complex owned by the company, have no longer been
allocated since 2016. It resulted in decreased production in Elektrėnai, which
was 63.4 percent lower (Half 1 of 2015 – 0.445 TWh, Half 1 of 2016 – 0.163
TWh), and a decline in revenues. 

Nevertheless, the Company exploited capacities of the Elektrėnai complex to the
maximum considering the situation in the market – with the production of
electricity in efficient combined cycle unit (CCU) and successful sale thereof
on the exchange, about EUR 1.3 million in gross profit was earned. This amount
respectively reduces the budget allocated for the Company to ensure the
provision of public services, which renders direct benefit to each electricity
consumer, because the public service obligation (PSO) component has been
included in electricity tariff. 

“During Half 1 of this year alone, combined cycle unit in Elektrėnai was
launched twice as much as in the whole last year. We have successfully
exploited this powerful facility both contributing to the assurance of
stability in electricity system and seeking for the maximum return for
shareholders and value for all electricity consumers” - said Eglė Čiužaitė,
Chair of the Board and CEO of Lietuvos Energijos Gamyba. 

Thus, commercially successful CCU activities in Half 1 of 2016, compared to
Half 1 of 2015, production in Kaunas Algirdas Brazauskas' Hydroelectric Power
Plant having grown by 15.8 percent (from 0.175 TWh to 0.203 TWh) as a result of
increased amount of water in Nemunas and responsible management of operating
costs led to the fact that regardless of the reduction of the overall income
level, the Company’s profitability indicators grew. 

Compared to the data of Half 1 of 2015, the Company’s EBITDA margin in Half 1
of 2016 increased by 2.9 percentage points to 31 percent. EBITDA of the Company
was EUR 21.7 million (compared to EUR 28.3 in Half 1 of 2015). Based on
resolution of the National Commission for Energy Control and Prices (NCC), the
share of profit from commercial activities of Kruonis PSHP and Kaunas HPP for
Half 1 of 2016 – a total of EUR 9.2 million – was directed for covering fixed
costs of the Company incurred in the performance of regulated activities
providing PSO. Having excluded effects of NCC decisions currently appealed in
courts, according to preliminary estimates, the Company’s EBITDA in Half 1 of
2016 would have been EUR 11.1 million greater (in Half 1 of 2015 effects of
these factors totalled EUR 6.9 million). 

The Company’s profit earned during Half 1 of 2016 can be used to cover EUR 10.5
million of PSO funds, which is almost 38 percent of all PSO funds allocated for
the Company in 2016 approved by the NCC. 

Net profitability of the Company increased from 17.9 percent (in Half 1 of
2015) to 19.9 percent during the year. Net profit in Half 1 of 2016 was EUR
17.8 million (compared to EUR 19.3 million in Half 1 of 2015). Sale of the
wholesale electricity trade business share had a significant possible effect
thereon. If it wasn’t for significantly decreased market prices of emission
allowances (EA), the Company’s profit would have been even greater and would
have exceeded last year’s profit by a third. However now a loss of EUR 7.9
million as a result of the changed value of EA and accounted right to receive
EA had to be reflected in financial statements of Half 1 of 2016. 

Half 1 of 2016 was outstanding not in Elektrėnai alone. Kruonis PSHP also
calculates that this year its emergency reserve was activated much more often
than usually, with the amount of electricity getting into Lithuania having
suddenly decreased. “Upon the launch of new interconnections and change of the
market, a very important function of our power plants, namely, provision of
instant help to electricity system and a significant contribution in the
assurance of its stability, became apparent. I am glad that our professional
employees managed to quickly adapt to market changes and ensure that we were
able to assure stable, reliable and most efficient electricity supply”, – said
the CEO of Lietuvos Energijos Gamyba. 


         Valentas Neviera, Lietuvos Energijos Gamyba, AB, Head of Corporate
Communications Division, tel. +370 670 25997, e-mail: valentas.neviera@le.lt

Attachments:

LEG Key Performance Indicators for January-June 2016.pdf

LEG Interim Report and Condensed Interim Financial Information for January-June 2016.pdf