2014-05-30 08:00:04 CEST

2014-05-30 08:00:09 CEST


REGULATED INFORMATION

Lithuanian English
Lietuvos energijos gamyba, AB - Interim information

Operating results of "Lietuvos energijos gamyba", AB Group for the three-month period of 2014 


Elektrėnai, Lithuania, 2014-05-30 08:00 CEST (GLOBE NEWSWIRE) -- Lietuvos
Energijos Gamyba group‘s operating results improved due to increased
electricity sales in the free market 


The group of companies of Lithuania‘s largest electricity producer Lietuvos
Energijos Gamyba (‘the Group') has recorded LTL 59.5 million earnings before
interest, tax, depreciation and amortisation (EBITDA). Successful trading in
electricity in the free market and increased generation at hydro electric power
plants have contributed to the good results of the Group. 

The first three months of 2014 did not bring any surprises to the electricity
market. January, February and March were slightly warmer than usual, with the
average temperature in Lithuania exceeding the standard value, and there were
no significant restrictions on intersystem capacities in this period,
therefore, subsidised electricity was generated in Lithuania only by
co-generation plants of the cities. In the January - March period, the average
electricity price in the Lithuanian bidding area of Nord Pool Spot was 4.3%
lower than in the same period of 2013 and was 146.5 Lt/MWh. For comparison, in
September and October 2013, when import opportunities were significantly
restricted, the average electricity price in the Lithuanian bidding area was
almost 50% higher. 

Thus, based on a stable situation in the electric power system and seeking to
save the funds of the public interest services (PIS), the company was able to
comply with the plan agreed with Litgrid, the Lithuanian transmission system
operator, and not to put into operation the reserve generation units and the
combined-cycle unit of the Elektrėnai complex during the January - March period
of 2014. Furthermore, since the beginning of 2014 LESTO, the distribution
network operator, started purchasing electricity on the exchange, which has led
to a decrease of the Group's sales under bilateral contracts.  As a result, the
Group‘s revenues were reduced by one fourth: from LTL 221.9 million in the
January-March period of 2013 to LTL 165.3 million in the same period of 2014. 

According to Juozas Bartlingas, Chairman of the Board and CEO of Lietuvos
Energijos Gamyba, the decrease in revenues has been compensated by the
professionalism of the company‘s sales personnel, which has enabled the company
increase the electricity sales in the free market by nearly one third, and by
the increased power generation at the competitive Kaunas Hydroelectric Power
Plant (‘Kaunas HPP') and Kruonis Pumped Storage Hydroelectric Plant (‘Kruonis
PSHP') due to warm winter. ‘In addition, costs were reduced considerably in the
first quarter of 2014 compared with the first quarter of 2013 due to lower
expenses for fuel and the use of the opportunities for purchasing cheaper
electricity. This has resulted in better profitability ratios of the Group in
the first quarter of 2014 compared with last year', says J. Bartlingas. 

In the period of January - March 2014, the Group‘s EBITDA margin was 36%.
Compared with the same period of 2013, the EBITDA margin has increased by 9.5
pp (from 26.5%). EBITDA has increased from LTL 58.8 million to LTL 59.5
million. The net profitability of the Group has grown by 16.8 pp: the net
profitability ratio for the 3 months of 2014 was 3.1%, for the same period of
this year 20%. Net profit of the Group in the period of January-March 2014 is
LTL 33 million, which is nearly five times more than in the same period of 2013
(LTL 7 million). 

‘We are pleased that successful operations of Lietuvos Energijos Gamyba are
being noticed. As shown by the results of the procurement procedure for the
refinancing of the company‘s loans, which was completed in the first quarter of
this year, creditors' trust in the company and the energy sector as a whole is
growing, which enables us to realise our goals. We will continue focussing on
our priorities: increase in the efficiency of operations, project development
and analysis of new opportunities. We plan to put the new Elektrėnai thermal
energy generation capacities into operation at the end of 2014, and are
continuing wind measurements in the territory of Kruonis PSHP. The results of
these measurements will form a basis for our decision on the feasibility of
construction of a wind farm next year‘, says J. Bartlingas. 

Production indicators

The electricity generation volume of all the company‘s power plants totalled
0.245 TWh in the 3 months of 2014. Last year it amounted to 0.3 TWh, which is
22.4% more. 

As already mentioned above, no electricity was generated at the Elektrėnai
complex during the first 3 months of this year. It had been planned last year
that in the period from 1 April until 15 October the operation of the units of
the complex would be based on a schedule agreed with Litgrid, in order to
ensure a reliable operation of the power system and an efficient use of the PIS
funds allotted to the Elektrėnai power plant. 

During the 3 months of 2014, Kaunas HPP generated 0.113 TWh of electricity,
which is 12% more than in the same period of 2013. The average flow rate in the
River Nemunas was higher in January and February, and close to the average
multi-annual flowrate in March. 

Production volumes of Kruonis PSHP increased 8% during the 3 months of this
year compared with the same period of last year: the power plant produced 0.132
TWh of electricity. 

Regulated and commercial activities

In the first quarter of 2014, there has been a decrease in the Group‘s revenues
from both regulated and commercial activities, however, the share of the latter
in the overall revenue structure has been increasing: commercial revenues
accounted for 59% of total revenues in the 3 months of 2013 and for nearly 65%
in the same period of 2014. 

Regulated activities of the Group include the generation of electric and heat
energy at the Elektrėnai complex and the power reserving services provided by
Kruonis PSHP and the Elektrėnai complex. As no electricity was generated at
Elektrėnai, the Group‘s revenue earned from regulated activities during the 3
months of 2014 was 36% lower compared with the same period of 2013 (LTL 58.3
million). 

Revenues from commercial activities, which consist of the electricity
generation at Kruonis PSHP and Kaunas HPP and the wholesale and retail trading
in electricity in the free market as well as other commercial services, have
dropped 18%. Due to the change in the arrangement of electricity sale to LESTO,
revenues from commercial activities decreased from LTL 131 million during the 3
months of 2013 to LTL 107 million in the same period of 2014. 

The Group‘s electricity sales in the free market during the 3 months of 2014
increased 30% compared with the same period of 2013 (0.414 TWh and 0.318
respectively). Professional trading activities have enabled the Group to
increase its EBITDA from LTL 20 million for the 3 months of 2013 to LTL 30
million for the 3 months of 2014. 

The company has started trading according to the gross bidding arrangement in
March 2014 and is concluding its electricity purchase and sale transactions
separately. The company is determined to continue its contribution to enhancing
market transparency and, at the same time, it will seek to maximise the use of
the opportunities provided by Kaunas HPP and Kruonis PSHP to compete in the
market by the electricity price. 



Lietuvos Energijos Gamyba, AB is a company listed on NASDAQ OMX Vilnius
Electricity Exchange. 96.13% of its shares are held by Lietuvos Energija, UAB,
a state-controlled private company. 

The Group of Lietuvos Energijos Gamyba consists of the parent company Lietuvos
Energijos Gamyba, AB, which controls the reserve power plant and the
combined-cycle unit in Elektrėnai, the Kruonis Pumped Storage Hydroelectric
Plant and the Kaunas Hydroelectric Power Plant, as well as of private companies
Energijos Tiekimas UAB and Kauno Energetikos Remontas UAB. 




         Valentas Neviera
         Head of Corporate Communication Division
         Lietuvos Energijos Gamyba, AB
         Tel. +370 619 62019
         Email: valentas.neviera@le.lt