Energijos Skirstymo Operatorius AB - Interim information

ESO H1 2016 results: revenue up by 3,3% up to EUR 334 million, net profit up by 4,9% up to EUR 53 million

Energijos Skirstymo Operatorius AB, identification code 304151376, registered
office placed at Aguonu str. 24, Vilnius, Republic of Lithuania. The total
number of registered ordinary shares issued by company is 894 630 333; ISIN
code LT0000130023. 

Electricity and gas distribution company Energijos Skirstymo Operatorius, AB
(hereinafter – ESO), which is a part of the largest Lithuania’s energy group
Lietuvos Energija, UAB (hereinafter – Lietuvos Energija), during the first half
of this year has improved key financial indicators. After merging of LESTO AB
(hereinafter – LESTO) and joint stock company Lietuvos Dujos (hereinafter –
Lietuvos Dujos) into ESO in the beginning of this year, operating expenses
declined by more than a tenth. 

During January-June 2016 the net profit of ESO amounted to EUR 53.2 million –
4.9% more than in the first half of 2015 when LESTO and Lietuvos Dujos
consolidated net profit amounted to EUR 50.7 million. Net profit increased due
to increased revenue and reduced operating costs. 

ESO revenue in the first half of 2016 amounted to EUR 333.95 million – 3.3% up
compared to January-March in 2015, when it amounted to EUR 323.174 million.
Revenue increased due to higher electricity and natural gas distribution
volumes. 

ESO operating expenses during first half of 2016 compared to the same period of
2015, decreased 12.3% and amounted EUR 48.96 million. 

During the first half of this year ESO allocated 4.488 billion kWh of
electricity and 3.93 billion kWh of natural gas - respectively 5.6% and 3.4 %
more than in the first half of 2015. 

"The emerging synergy of electricity and gas distribution system operators
allows us to achieve even better results. Having reduced our operating costs,
we directly contribute to more favourable energy prices for our customers. It
is also gratifying that the number of new natural gas customers’ contracts are
growing twice as fast as last year. We notice that new customers are more
likely to procure our services online, so we constantly rolling out new
functionalities at www.eso.lt  and self-service portal www.manogile.lt, which
allows to submit requests to connect to our electricity or gas networks in a
more simple and faster way,"- says Chairman of the Board and CEO Liudas
Liutkevičius. 

According to the head of ESO, considering needs to receive services from a
single source, a pilot project was launched in Kaunas. 

„During this project we started to offer internal electricity and gas network
installation services to customers in their territory. We can also make all the
electrical input related work where electrical input power is up to 500 kW, and
the next year we plan to offer this service to larger customers. We strive to
make connection to our networks even simpler and faster,” – says L.
Liutkevičius. 

During six months of 2016 ESO investments in the electricity and gas
distribution networks amounted to EUR 51.24 million – 11.4% more than during
January-June in 2015. Major part of the investment – almost EUR 26 million –
was assigned to the modernization of electricity distribution network. 

During January-June of 2016 ESO EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) amounted to EUR 87.7 million – 3.84% more
compared to the first half of 2015. EBITDA margin increased by 0.12% points and
amounted 26.26%. 

During six months of 2016, electricity, natural gas purchase and related
services costs made up EUR 197.3 million and, compared with the same period of
2015, increased by 7.9%. This was mainly influenced by increased electricity
transport volumes, increased transmission cost and higher natural gas
distribution volumes. 

Significant impact on the electricity distribution network operation during the
first half of 2015 had more frequent natural disasters, which resulted in very
changeable weather, compared to the same period last year. The majority of
natural phenomena that led to power outages in the network happened during
June. 

During six months of 2016 with the influence of natural disasters (“force
majeure”) the system average interruption duration index (SAIDI) per customer
amounted to 114.9 minutes. This is 60.01 minutes more compared to the same
period in 2015, when it amounted 54.89 minutes. The system average interruption
frequency index (SAIFI) with the influence of natural disasters per customer
reached from 0.66 – 0.13 times more compared to 2015 January-June, when it was
0.53 times. 

ESO shares are quoted on the Nasdaq Vilnius. The state-owned energy company
Lietuvos Energija owns 94.98% ESO shares, remaining shares are traded on the
stock exchange. 

2016 H1 ESO results: CEO video commentary


         Representative for Public Relations Martynas Burba, tel. (8~5) 2514516.

Attachments:

2016 H1 ESO interim report.pdf

ESO financial results.pdf