2016-02-26 15:00:05 CET

2016-02-26 15:00:05 CET


REGULATED INFORMATION

Lithuanian English
Lietuvos energijos gamyba, AB - Interim information

In 2015 Lietuvos Energijos Gamyba changed in response to market changes 


Elektrėnai, Lithuania, 2016-02-26 15:00 CET (GLOBE NEWSWIRE) -- Performance
results of the national electricity producer Lietuvos Energijos Gamyba of 2015
directly reflect significant decisions made by the regulator and the Company
itself. The Company still seeks to annul the decisions of the regulator in
court, meanwhile, decisions of the Company itself allow the refined production
company to operate in a more competitive manner and reduce the burden of
subsidies on consumers. 

In 2015, the Company’s sales revenue totalled EUR 203.10 million and was 12.1
percent lower than sales revenue of 2014 (EUR 231.08 million). Pre-audited
earnings before interest, taxes, depreciation and amortization of Lietuvos
Energijos Gamyba amounted to EUR 50.27 million in 2015, and was 21.5 percent
lower than EBITDA of 2014 (EUR 64.02 million). Negative change of indicators
was determined by decisions of the National Commission for Energy Control and
Prices (NCC) made back in 2014 on the results of inspection of the Company’s
activities in 2010–2012 and the recognition of the Company as having a
significant impact in the electricity production market. In light of such
decisions, reduced prices of regulated services were set for the Company for
2015. 

“We appealed these decisions in court as soon as they were adopted, and still
are consistently defending our position in order to have the Company’s
activities be evaluated correctly, given the actual market conditions,
provisions of all applicable laws and previously adopted regulatory decisions”,
- said Eglė Čiužaitė, Chair of the Board and Chief Executive Officer of
Lietuvos Energijos Gamyba. According to her, the Company believes in favourable
judicial outcome, however, it did not include this revenue in its financial
reports of 2015 pursuant to auditor recommendations. 

Having excluded the effects of the said decisions of the NCC, the Company’s
revenue would be 7.8 percent greater in 2015, while its EBITDA would account
for about EUR 66.2 million, which would be more than during the same period of
2014, regardless of the decreased scope of commercial electricity production.
Respectively, EBITDA margin would account for 28.7 percent, which is 1.3
percentage points more than in 2014. 

Year 2015 was record arid, therefore, production in Kaunas Algirdas Brazauskas'
Hydroelectric Power Plant decreased due to extremely low water levels in
Nemunas. In 2015, this power plant produced 13.4 percent less electricity
compared to 2014. Production volumes in Kruonis Pumped Storage Hydroelectric
Plant remained the same as in 2014. Meanwhile, Elektrėnai complex, where
electricity was produced with the aim to ensure supply security during the warm
season, produced 24.4 percent more electricity than in 2014. Almost 2,007 TWh
of electricity generated in power plants owned by the Company was sold during
2015. Compared to 2014, the produced electricity amount increased by 9.3
percent. 

According to the Chief Executive Officer of the Company, other challenges,
which Lietuvos Energijos Gamyba faced in 2015, were provided for in its
strategy. “The energy market has been changing very rapidly, thus we
reallocated our forces and set ourselves a task to increase the Company’s
flexibility, reduce operational support costs and better adapt to market
changes”, - said E. Čiužaitė and listed the major works performed. By
separating electricity and heat production, the Company completed the
construction of a new biofuel power plant in Elektrėnai and started
decommissioning Units 1 and 2 of the reserve power plant in 2015. Refining its
activities as a production company, it separated commercial electricity
wholesale, while in the implementation of a strategic goal to reduce the need
for services of public interest, the Board of Lietuvos Energijos Gamyba made a
decision on the decommissioning of Units 5 and 6 as from the beginning of 2016. 

The latter decision, which led to recognition of a one-time loss of EUR 30
million due to the impairment of non-current tangible assets and restoration of
asset-related grants, had a negative impact on the company’s net result in
2015, thus the company incurred net loss of EUR 0.23 million in 2015 compared
to its net profit of EUR 33.41 million in 2014. 

It is important that the decommissioning of merely used production facilities,
which are in poor technical condition and require high maintenance costs,
allowed taking a large step in the implementation of the company’s strategic
goals. First of all, this will help reduce the burden of subsidies on
electricity consumers, and secondly, this will allow increasing the Company’s
value focusing on the ensurance of reliability of facilities necessary for
energy security, efficient exploitation thereof and increase of operational
competitiveness. 

In the preparation for 2016 - operations without a production quota in an even
more changed market as a result of the emergence of new connections -
specialists of the Elektrėnai complex owned by the Company adapted to working
at the mode of ensurance of strategic reserve. Here, optimal capacities are
exploited to ensure electricity demand, and heat energy is already produced
from biofuel, while hydroelectric power plants continue generating competitive
electricity. 

“Last year, we sold shares of our subsidiaries and, in order to focus on
efficient energy production, we sold a part of commercial electricity wholesale
activities conducted by the company to Energijos Tiekimas, where the wholesale
and retail electricity competence has been focused since the beginning of this
year. Thus now Lietuvos Energijos Gamyba is the energy production company,
which is flexible and open to changes seeking to implement its strategic goals,
increase the value of the company and contribute to the fostering of welfare of
all stakeholders”, - said the Head of the company. 


Lietuvos Energijos Gamyba, AB is listed on NASDAQ OMX Vilnius Stock Exchange.
96.13% of its shares belong to the state-owned 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, thus the press release will comment solely the
results of the company in the future. 


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